Limited Slashes Jobs, Boosts Buyback

The retailer will cut 10% of its staff and increase its repurchase plan to $1 billion.
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Specialty-retail conglomerate

Limited Brands

(LTD)

said Friday that it plans to cut its staff by 10% and double its share repurchase program.

Shares of the Columbus, Ohio-based company were climbing 83 cents, or 3%, to $28.02 in recent trading.

Limited, which operates chains such as Victoria's Secret and Bath & Body Works, said it will cut about 530 positions at its corporate and brand headquarters. The company currently has about 5,300 employees at those offices.

The cuts will be made through the elimination of open jobs, layoffs of current staff and employee transfers to the Express business in conjunction with its upcoming sale.

Limited agreed last month to sell a majority stake in Express, a trendy mall-based clothing chain, to private-equity firm Golden Gate Capital. The company, seeking to focus on its lingerie and beauty brands, also said it is exploring options for its Limited chain of clothing stores.

The company's cost-cutting plan is expected to save about $100 million annually beginning in fiscal 2008. Limited said it will detail one-time costs and the specific impact on 2007 financial results at a later date.

"We are on track with our value-enhancing strategic initiatives and are now ready to embark on fine-tuning the organization to better match the size and complexity of the 'new Limited Brands' where we'll focus primarily on intimate apparel and personal care," Leslie Wexner, chairman and CEO, said in a statement.

Limited also said it is increasing its $500 million share buyback program to $1 billion. So far, it has repurchased $190.5 million worth of shares under the plan, and it intends to take on debt to accelerate the rate of repurchases.

The company plans to raise $1.25 billion of debt to fund the repurchases, as well as pay for the recent acquisition of Canadian lingerie retailer La Senza.

The company said it is still exploring strategic alternatives for its Limited business, though it has no timetable for the process. The company also said it is evaluating alternatives for other "non-core" assets, including real estate and other investments.