Bath & Body Works Makes Global Debut With Six Canadian Stores

Inspired by growing brand awareness around the world, beauty retailer Bath & Body Works is expanding outside of the U.S. with the opening of six stores in Canada this fall, Limited Brands announced July 10.

Retail doors will open in September and October in the Canadian cities of Toronto, Mississauga, Guelph, Edmonton and London, the firm said, noting that the stores will create 250 new full-time and part-time jobs.

While declining to provide specifics on its overall expansion strategy, Limited Brands suggested that B&BW will pursue additional stores in Canada as well as enter new markets overseas.

In talking to potential customers and partners in other regions of the world, the firm has found that unaided brand awareness for both B&BW and Victoria's Secret is "off the charts," Limited Brands Executive VP, CAO Martyn Redgrave said during the Wachovia Equity conference June 25.

With 1,600 B&BW stores in the U.S., Limited Brands feels the time is right to capitalize on the international buzz surrounding that brand and Victoria's Secret, which likely will also be introduced in Canada in the near-term, the firm noted.

The company's timing is appropriate, as its recent acquisition of Montreal-based lingerie business La Senza provides a stepping-stone into the Canadian market, according to the company.

Limited Brands says it will proceed with care in its growth ventures abroad.

"We've never done this before. So we are being very thoughtful, very [tactical], very careful about how and where and with whom we do it," Redgrave said. "But we are making a lot of progress in our efforts to identify the answers to those questions."

While implementing its global expansion plan, the company continues to focus on its primary goal - growing its core brand in the U.S.

Last year, B&BW opened 35 new doors and announced plans to open 30 more by mid-November 2008.

However, the company is pulling back on certain growth initiatives for both B&BW and Victoria's Secret in the U.S., Redgrave noted during the analyst conference.

Projects planned for this year, including early renewals of retail leases, have been reduced by about 35 percent, with capital spending lowered by a "couple hundred million dollars," according to Redgrave.

Regardless, "we are continuing to pursue the basic strategy of expanding the footprint of Victoria's Secret in the mall and continuing to fill out the white space of growth opportunities for BBW outside of the mall," the exec said.

Having launched efforts last year to cut under-performing SKUs and refresh the look of its stores, Limited Brands continues to reposition B&BW as "the affordable luxury alternative to mass," according to Redgrave (¹ (Also see "Limited Brands Anticipates Winning Holiday Season, Growth Ahead" - HBW Insight, 29 Oct, 2007.), p. 6).

The company also is pursuing an inventory efficiency program for the brand centered on leveraging new technologies and systems capabilities, the exec noted. Thus, "we are operating that brand at a substantially lower level of inventory than its comp store sales would demand," he said.

Earlier this year, B&BW CEO Diane Neal said the company's primary goals for 2008 included reinvigorating the brand, improving brand consistency and stemming negative sales trends related to traffic declines in retail locations (² 'The Rose Sheet' March 3, 2008, In Brief).

B&BW's key brands include C.O. Bigelow and True Blue Spa ; the company also has offerings in aromatherapy and fragrant body care.

Over the past 18 months, Limited Brands has been working to deemphasize apparel and sharpen its global focus on core brands B&BW and Victoria's Secret.

As part of that plan, the company recently divested its Limited and Express clothing businesses (³ 'The Rose Sheet' July 16, 2007, In Brief).

- Eileen Francis ([email protected])