Last night, Columbus, Ohio-based Limited Brands (NYSE:LTD) issued a press release describing its plans to reorganize its operations into three distinct groups: lingerie, beauty and personal care, and apparel. Sounds meaningful enough -- but there's more unsaid than said in the company's statement, which provides clues as to its strategic direction and plans for future growth.
The reason it pays to read between the lines is that if you look over Limited's last annual report, it notes that the company was already more or less divided into three distinct groups that look a lot like the ones discussed today: Majority-owned Victoria's Secret covered lingerie, Bath & Body Works handled beauty and personal care, and Apparel Businesses (representing the Express and Limited retail chains) was all about, well, the apparel business. Upscale New York retailer Henri Bendel operated separately; White Barn Candle Co. was part of Bath & Body Works.
Taken simply, yesterday's reorganization was little more than a renaming. Taken in the context of the broader changes at Limited Brands over the past two years, however, it appears that this news is a reminder that the company -- once a mishmash of retail brands investors mostly used as a cheapskate backdoor means of owning Victoria's Secret predecessor Intimate Brands -- is positioned to return to the days when investors waited impatiently for the next pocket-fattening spinoff a laAbercrombie & Fitch (NYSE:ANF) or Too (NYSE:TOO).
The company has divested unwanted assets and bought back shares in recent years, positioning it well for profit growth. The lingerie and beauty businesses have been strong performers; yesterday's reorganization ensures that those -- and the company's other businesses -- are managed by individuals who will consider their place in the entire Limited universe, rather than within themselves. An example is the placement of Henri Bendel under beauty and personal care, perhaps fitting since it recently rolled out a fragrance line at Bath & Body Works.
Henri Bendel, meanwhile, may be a target for further store expansion if a late 2004 test is any indication. C.O. Bigelow, an upscale beauty products retailer, is also a candidate. And a former Avon Products (NYSE:AVP) exec has been brought in to build the Pink lingerie product line into a "lifestyle brand." Limited, all told, was once known as a sum of disparate parts: It may be that yesterday's announcement is a signal that it would rather be known as a whole.
Fool contributor Dave Marino-Nachison doesn't own any of the companies in this article.
