MGMT 495 Summer 2011: Kelly Bossolt Marta Kovorotna Sarah Smith
+ Kelly Bossolt MartaKovorotna Sarah Smith. + Executive Summary: Industry Overview Company History...
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Transcript of + Kelly Bossolt MartaKovorotna Sarah Smith. + Executive Summary: Industry Overview Company History...
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Kelly BossoltMartaKovorotnaSarah Smith
+Executive Summary:
Industry Overview
Company History
Financial Analysis
Internal Analysis
External Analysis
Recommendations
Questions
+Industry Overview:
How big is the apparel retail industry?
2008: Grew 3% Valued at $1,025.9 Billion
2013 Said to increase by 15%
Consumers have power
Technology is crucial: Maintenance and Inventory
Outsource vs. In house
+Company History: Growth in the early years
Leslie Wexner: Founder
1963: $5,000=Birth of The Limited
Year One: Exceeded goal to gross $100,000 by
$62,000
1965: Corporate headquarters 100 employees
1968: Sales reach $1 million
+Company History: Growth in the early years
1969: IPO
1978: Purchased of Mast industries Gained access to 150 production facilities
1982: NYSE
1986: Sales reach $3 billion
1989: Forbes rates The Limited Brands Inc. 1st in growth and profitability
2003: FOURTUNE : “World’s most admired specialty retailer”
+Financial Analysis: Industry and Competitor
Comparison
Company: EBITDA 2011: Debt-to-Equity 2011: Price-to-Earnings 2011:
Ltd Inc. 1.72B 311.45 14.57
Abercrombie & Fitch 567.24M 3.66 16.11
Gap Inc. 2.52B 33.04 10.38
LVMH Moet Henessy, LV 5.11B 28.93 20.5
Industry 11.92B 31.13 28.78
Pros: Cons:
Strong P/E ratio Highly leveraged with $3.11 of debt to every dollar of equity. Industry average is $.31.
+Financial Analysis: 2010
90,000 associates 2,600 stores in the U.S. 5 brands Record Sales of $9.6 Billion
+Internal Analysis: The Brands
Inspire
Empower
Indulge
SexyBold
+Internal Analysis: Resources
Quality
Reputation
Market Position
Store Locations
Technology
MAST
+Internal Analysis: Capabilities
Brand Equity
Lean Inventory
Inventory Turnover
Premium Prices
International market
Sourcing & Logistics
+Internal Analysis: Competitive Advantage
Brand Name
Technology
Consumer Market (NOT market share)
+Internal Analysis: Sustaining Competitive Advantage
Easy Imitation Differentiation
Slow and Steady
360 Degree Brand Potential
+External Analysis: Customers
Target markets
Merchandise seasonal transition
New product lines Top fashion Higher prices Unique items
Seasonal Sale
Slower economy Frequent sales Higher markdowns
+External Analysis: Complements
Victoria’s Secret & Pink
La Senza Body and skin care products Fragrances Makeup
Bath & Body Works Gift wraps Accessories
Henry Bendel Home fragrances and candles Beauty and fragrance Gift wraps
+External Analysis: Suppliers and Partners
More than 1,000 suppliers around the world MAST
Supplier Diversity Program Accel, Inc.
Tara Abraham Millcraft Paper Company
World Financial Capital Bank
+External Analysis: Suppliers and Partners
Business Council for Global Development
Trade, Aid and Security Coalition
Pacific Links Foundation
American Association of Textile Chemists and Colorists
Consumer Specialty Association
National Candle Association
+External Analysis: Suppliers and Partners
US EPA Climate Leaders, WasteWise, SmartWay
Forest Ethics
Recognition 2005 EPA Gold
Achievement Award 2007 EPA Environmental
Excellence Award 2011 1st place Team in
Komen Race for Cure
+External Analysis: Substitutes and Competition
Gap Banana Republic, Old Navy,
Piperlime, Athleta
LVMH Moet Hennessy Louis Vuitton Dom Perignon, Fendy, Marc
Jacobs, DKNY
Hanesbrands Hanes, Champion, Playtex,
Bali, Just my Size, etc.
American Eagle’s Aerie
Abercrombies’ Gilly Hicks
+External Analysis: Substitutes and Competition
Sephora Christian Dior, Guerlain,
Givenchy, etc.
The Body Shop L’oreal
+Recommendations:
International Growth
Reduce the Debt-to-Equity ratio
Sell More, Offer Less
Relationship Building
+Questions???