Financial Analysis of Limited Brands and Gap Inc.
The Limited Brands is a publicly held, women’s retailer that specializes in intimate apparel, beauty and personal care products. This company operates under brand names such as Victoria’s Secret, Bath & Body Works, Express and The Limited. Throughout the past five fiscal years The Limited has improved their gross margin and has had a 5.6% net profit increase since 2011 (MarketLine LTD Company Profile). This increase is significant to the company holding a competitive edge over companies such as, The Gap. Gap Inc. is a strong competitor to the Limited brands, because they too has multiple strong brand names such as Gap, Banana Republic, Old Navy and Piperlime and specialize in women’s, children’s and men’s apparel. In order for the Limited to obtain greater market share and to remain competitive with Gap, they must look internally and externally at their company’s role in the retail world to identify strengths, weaknesses, opportunities and threats within the marketplace. Strengths
1. Strong Brand Names
Limited Brands’ Victoria’s Secret and Bath & Body Works are the company’s two most highly recognized brands by consumers. A SWOT analysis done by MarketLine, stated that these two brands have built strong value amongst customers throughout the years (MarketLine LTD Company Profile). Victoria’s Secret appeals to many different types of women ranging from older ages to the college and young adult aged consumer. Since the brand has a wide variety of customers, they are able to produce various types of products that appeal to their target markets and create a strong brand loyalty amongst these customers. 2. Improved, Higher Profit Margins (INSERT GRAPH)
With the increase of the number of sales within the Victoria’s Secret and Bath & Body Work stores, in addition to the increase in popularity, Limited Brands has been able to improve their gross margin between the last five years. As you see from the graph below,...
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