TSC Staff
Updated from 3:51 p.m. EDT
Limited Brands(LTD Quote - Cramer on LTD - Stock Picks) reached a deal to sell a majority stake in its Express apparel brand and said it is exploring options for its Limited women's clothing chain. The Columbus, Ohio, retailer also slashed its first-quarter earnings estimate, citing weak sales and lower margins. Shares slid 4.5% Tuesday to close at $26.18. Limited plans to sell 67% of Express to Golden Gate Capital for $548 million. With the move to sell Express and potentially Limited, the company would be left to focus on its Victoria's Secret lingerie brand and its Bath and Body Works beauty business. "The new Limited Brands will look much different," Martyn Redgrave, chief administrative officer and executive vice president, said in a prerecorded message about the move. "Virtually all our revenue will be generated from our highly profitable, high-return intimate apparel and personal care and beauty businesses." The company also said it has no timetable on completing the exploration of strategic options for the Limited chain, which like Express has been hit by ongoing sales declines. A sale or spinoff of the chains has been frequently circulated on Wall Street as a possibility. Express, a trendy mall-based chain, had 2006 sales of $1.7 billion, and it currently has 631 locations. Limited, meanwhile, had sales of $493 million in the latest fiscal year, with 253 locations. Redgrave said the company is still seeking to take advantage of the growth of Express through the remaining stake. He said Limited is "encouraged by the progress and improved performance of Express."
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