The Limited retail chain began laying off some of its 248 employees at New Albany headquarters on December 2. Company officials have not announced what will happen to its 250 retail stores.
Founder Les Wexner started The Limited in Columbus more than 50 years ago. He spun it off into other business ventures including Victoria’s Secret and Bath and Body Works.
The owner since 2007 has been Sun Capital Partners Inc., a private equity firm in Florida.
Debbie Holmes talks with Lee Peterson, executive vice president of Brand, Strategy & Design for WD Partners and former Limited employee about the company's financial situation.
The below is an automated transcript. Please excuse minor typos and errors.
Debbie Holmes: So what do you understand is going on right now about the financial situation of The Limited?
Lee Peterson: I think it's a pretty dire situation and they're talking about closing headquarters, which eventually would mean closing stores. I mean, if you don't have the support system for the stores then obviously stores are going to close too. So they've talked about closing the headquarters and I think that that's probably about as bad as it can get.
Debbie Holmes: But it sounded also like they were looking for a buyer.
Lee Peterson: Yes. And they also said that if they couldn't find a buyer within a certain period of time then that's when they would take more drastic measures, like closing the offices.
Debbie Holmes: Have the layoffs started yet?
Lee Peterson: I don't think so. I think that there was a period there, they were talking about a grace period of a few weeks.
Debbie Holmes: How do you think this started then? Les Wexner, the founder of the Limited, sold the Limited in 2007. But I understand there were already problems with sales.
Lee Peterson: Yes. So my experience, and I worked for Limited for 11 years, and my experience with Les was that he always would say, "I'm a merchant, so I look at what's good and what's bad. I marked down what's bad and I buy more of what's good."
At that time, I think 2007 or so, I think Les realized that the apparel business is very difficult business. The margins were swaying. There's tons of competition and I don't know how big online sales played into that, but that as well made a difference, so I think Les, acting like a merchant, got rid of his markdowns and bought more of what he thought was really strong, which was Victoria's Secret and Bath and Body Works.
Debbie Holmes: It is about the competition. There's just too many other retailers that women's clothing stores have to compete with. There's Forever 21, H&M, T.J. Maxx, Marshalls, and then the online retailers as well.
Lee Peterson: And I think that the Limited made a decision a long time ago, probably in the '90s, that they were going to go after a little bit older customer, professionals and mothers, so anywhere from 26 to, say, 40 years old, which, it's a much more difficult market. I mean there's a lot less expendable income, people in that age group are focusing on either being a mom, you know, or take taking care of kids, or taking kids somewhere, or if you have a professional career.
A lot of that shifted too from suit wearing and more professional clothes, I guess you could call them dressier clothes, to much more casual outfits as well. So I think that decision back in the' 90s to go after an older customer was probably the beginning of the downfall.
Debbie Holmes: Would it be impossible right now to start a clothing store here in this area?
Lee Peterson: The entire apparel market, you know, whether it's females or males, is just so much different than it was 20 or 30 years ago. There are so many more choices. And nowadays the first place you go on is online to look, then you may say, "I need a pair of pants," whether you're male or female. And you go online and you start looking you have 15 different choices of brands to choose from, 100 different choices of prices. So yeah it's much more difficult. It's extremely difficult also right now to have physical stores.
Debbie Holmes: You worked for the Limited in the 1980s. What was it like back then?
Lee Peterson: Personally, it was the best experience I ever had in my life. Professionally, I thought it was terrific. You know, we got to travel the world. We were also expanding like crazy, we were doing really well. Stock price was doubling, you know, every couple of years or so. Any of that stuff, any financial stuff aside, it was just really a great environment where we had a target audience that was really listening to everything that we put out there.