« Plastic Surgery Comes to Rodeo Drive in Beverly Hills / Los Angeles | Main | Edgar Ray Killen Should Get the Electric Chair »

June 23, 2005

Bath & Body Works Takes Over

The team at Pierce Mattie PR noticed our clients last year were suddenly receiving calls from the Limited Corporation. "They want to put us in Bath & Body Works" our clients would sing. This year the notes changed to "They want to put us in their Victoria Secret's Stores". And sure enough we have had brands hold back on their Sephora launches and focus on the Limited group. It's hard not to with private jets that pick you up and take you straight to their door. Their accounts speak major volume for all of our clients. Is this the same company I worked for in college, as a sales associate for Express, when their men's fashion label "Structure" was back then the Abercrombie of the early 90's? And where did I put my stash of employee stocks that I acquired while working there. Limited has evolved today, some say their name should change to Unlimited. The Associated Press reports...

Never heard of triple rose water? The sales associate in the white lab coat can tick off its benefits. Or try something more modern, such as a green-tea-inspired cleanser developed by a Beverly Hills plastic surgeon.

It's first thing in the morning at C.O. Bigelow Apothecaries, and the conversation you're overhearing could be part of a staff training sessions or just a casual conversation -- people at this store are serious about grooming products.

That attitude is shared by Limited Brands Chairman Leslie Wexner, who says the future of an Ohio-based company he built on women's apparel now lies in beauty products and underwear. Those items are less prone than apparel to seasonal changes in customer taste, are more driven by brand loyalty and offer predictable profit growth.

``We've reinvented ourselves completely. We are now predominantly a personal care, beauty and lingerie company,'' Wexner said in his annual letter to shareholders of Limited Brands, the parent of Victoria's Secret and Bath & Body Works.

Besides C.O. Bigelow, which opened its first store in October near Limited Brand's headquarters in New Albany, the company is also testing a new concept for lingerie stores and expanding the department store brand Henri Bendel into stores that sell home and beauty products.

Personal care products accounted for 30 percent of the company's 2004 revenue, up from 4 percent a decade earlier. In the same period, apparel sales shrank from 71 percent of the company's business to 29 percent, while lingerie grew from 25 percent to 41 percent. Limited Brands wouldn't make its top executives available to discuss the overall company's change in strategy.

Analysts have applauded the company's efforts. They note that a growing number of specialty clothing chains are carving the market into increasingly smaller segments, while the cosmetics market is relatively less crowded.

The experts also note that personal care products are bought more frequently -- people tend to use up hand lotion faster than they wear out jeans -- and customers are often more loyal to grooming products than clothing brands.

What's hot in fashion changes from season to season, making it harder to earn money at selling clothes, say experts.

``You come out with a new line, and the consumer just shrugs her shoulders and goes past that,'' said Kurt Barnard, president of Barnard's Retail Consulting Group in Nutley, N.J. ``It's like playing Russian roulette.''

Apparel drags on profit

It's a game Limited Brands has been losing. Figures show that two-thirds of its $9.4 billion in sales and nearly all its profit in 2004 came from Victoria's Secret and Bath & Body Works, while the apparel division has been a drag on Limited's profit. In the most recent quarter, apparel had a $68 million operating loss, while operating profits at the personal-care and lingerie chains grew over a year earlier.

Limited Brands is far ahead of its traditional rivals in developing stand-alone toiletries stores, but experts say the competition is catching up. Rival Gap announced in January that it was opening 11 Gapbody outlets, which sell lingerie, perfume and cosmetics.

The C.O. Bigelow store exemplifies the strategy of enticing customers to buy pricier, higher-margin products. Unlike the assortment at Bath & Body Works, nearly two-thirds of C.O. Bigelow's products come from outside brands, many of which are more expensive. Items include a 16-ounce bottle of lemon body lotion for $24 and a $100 razor.

``The objective with C.O. Bigelow is to own really the top end of prestige beauty retailing that is the alternative to department store beauty retailing,'' Bath & Body Works CEO Neil Fiske told analysts in March.

Limited Brands plans to open six more C.O. Bigelow stores this year.

The selection at the Columbus store wowed Linda Fogarty, 50, who drove an hour from Springfield to buy a facial cleanser she learned about at a Beverly Hills spa.

``It's fabulous... Just about everything you'd want is here: Brands that you read about and think, `Oh I can't get that in Ohio,' '' she said.

But teacher Carrie Williams of Columbus wasn't thrilled with the prices: ``Some things are very overpriced, but they do have a variety of lines.''

Posted by at June 23, 2005 11:02 AM

Trackback Pings

TrackBack URL for this entry:
http://www.piercemattie.com/cgi-bin/moveabletype/mt-tb.cgi/341