The Limited's comeback
The Limited CEO Linda Heasley at the store inside the company's New Albany headquarters. Photo by Jeffry Konczal.
Tyler Monroe is totally fabulous—and oh-so stylish.
She’s 28, works for a Chicago-based marketing firm and just bought a super-cool condo. Sure, Tyler has ambitious career goals, but she likes to cut loose and have some fun after work and on the weekends. Lately, this on-the-go gal is a one-man woman, although it’s too soon to tell if she and Colin will get hitched.
Tyler is also completely fictional . . . the creation of the Limited’s CEO Linda Heasley and her design/marketing team. Heasley, 55, is old enough to be Tyler’s mother—and does seem to take maternal pride in her offspring. “She’s fabulous, very engaged in life, modern and effortless in her style,” says Heasley, who talks about Tyler as though she were real, referring to her as “she” and “our girl.”
Being fictional hasn’t stopped Tyler from helping Heasley turn around New Albany-based the Limited, a chain of women’s clothing stores that had been losing money for years and was close to disappearing when it was sold in 2007 by retailing legend and Limited Brands founder Les Wexner. The Limited is now profitable, adding stores and on the short list of shopping destinations for millions of stylish, professional—and actual—women.
Heasley gives a lot of the credit to Tyler, calling her the “editing point” of the reinvigorated Limited, the inspiration for the clothes its sells and how they are marketed.
“Would Tyler wear this?” and “Where would she wear this?” are the questions Heasley and her team ask before new clothes and accessories are added to the line. If the answer is yes, the item is in. If the answer is no, if it’s too tacky, tasteless or stuffy for Tyler, then off it goes into the trash heap of glitzy, beaded and low-cut tops.
Their girl wouldn’t be caught dead in those blouses!
Heasley was asked to take over as CEO of the Limited in late 2006. At the time, she had been with Limited Brands for several years, in a variety of senior executive positions. Prior to coming to Central Ohio, the Cleveland native was an executive with Timberland and CVS.
She was reluctant and it took a little high-level arm-twisting to get her to lead the weak link in the Limited Brands chain, which is driven by megabrands Victoria’s Secret and Bath & Body Works. “At the time, I said, ‘If the Limited were to close its doors tomorrow, who would know?’ ” Heasley says, adding the answer was not too many women.
When Heasley did assume control, she spent a few months “kicking the tires of all the aspects of the business.” She discovered the Limited didn’t have a clear mission or target audience. “Each new general merchandise manager would have their own idea what it should be like,” she says. “One year it would be very sexy tops, the next year very conservative tops.”
Heasley concluded the Limited needed to concentrate on 25- to 35-year-old professional woman with a sense of style who wanted clothes appropriate for the office they also could wear after work to dinner or a night on the town.
Nobody owned this market. “Ann Taylor was too stuffy and old looking, Banana [Republic] was a little highbrow and stuffy, the Loft was way too casual, JCPenney and Macy’s had a horrible shopping environment,” Heasley says. “Nobody was doing this well.”
Heasley also realized part of her job was to prepare the Limited for sale. This happened in August 2007, with the purchase of 75 percent of the company by Sun Capital Partners, a Florida venture capital firm. Limited Brands did not receive any cash from Sun, which agreed to invest $50 million in the chain of stores.
Selling the Limited, once the flagship of Limited Brands, was a big leap for Wexner, says Howard Davidowitz, chairman of Davidowitz & Associates, a New York-based retail consulting firm. “The whole company and his fortune and all the acquisitions he later made was based on the profits from the Limited stores,” he says. “It was the cash machine that made everything else possible.” (Wexner opened the first Limited in 1963 in Upper Arlington’s Kingsdale Shopping Center.)
Davidowitz says that the 2007 sale could have been the beginning of the end for the Limited. “It was a disappearing asset, every year another 20 stores closed; they had been losing money for at least 10 years,” he says.
Wexner wanted to get out of fashion and concentrate on his two biggest and most stable assets: Victoria’s Secret and Bath & Body Works. Limited Brands also sold Express at about the same time. “Things are more stable with Victoria’s Secret and Bath & Body Works,” says Chris Boring, president of Columbus-based Boulevard Strategies, a retail consulting firm. “Fashion—and all retailing—is tough. You have to be able to predict trends months ahead of time.”
Sun kept Heasley on as CEO—and she quickly put into action her plan to turn the Limited into the kind of place Tyler would love. “The message we gave to the associates was what we’d been doing wasn’t working,” Heasley says. “This can be frightening, but it also gave us a license to make big changes, which can be very liberating.”
Heasley and her team immediately began cutting expenses. Some of these savings were passed on to the customer, others went into building the company. While cutting costs was important, it wouldn’t mean much unless they created a product line their target audience wanted to buy and wear. And so they created Tyler Monroe and began to look at everything they did—and sold—through the eyes of this eternally 28-year-old woman with a keen fashion sense and nonspecific ethnic background.
“We determined we were over designing some things, that she didn’t like the fussiness of some of our designs and what she really loves are washable fabrics,” Heasley says.
They also discovered that while Tyler is slim and trim, and a perfect size 6, not every young, professional woman has the same sleek build. “We found that the fit of our garments was an inch more nipped in at the abdomen than most of our competitors,” Heasley says.
This has led to a more relaxed fit—and a commitment to making sure the sizes of all the Limited’s clothes are standard, which makes it easier to shop online.
The result of these changes and the commitment to a more specific target audience seem to be working. The store was profitable for the 12-month period ending Nov. 30, 2009, the first time in 17 years, and has remained profitable, Heasley says.
Because the Limited is privately held, it is not required to report its earnings to the Securities and Exchange Commission and does not release these figures. Heasley did say total sales were about $500 million in 2010. The store count rested at 235 when the Limited was bought by Sun, dropped to a low of 217 and is back up to 230. Ten new stores opened in 2010 and plans call for adding another 15 to 25 a year for the foreseeable future.
The goal is 400 to 500 stores. By comparison, Limited Brands has about 2,900 stores and annual sales of $9 billion. “The word I’ve heard from shopping center developers is that the Limited is doing a lot better,” Davidowitz says, adding rent is based on sales and this is why mall landlords are in the know. “Their stores are busier and more contemporary and look more exciting; they’ve made a lot of progress.”
Sun purchased the remaining 25 percent of the Limited from Limited Brands in June. Heasley wouldn’t disclose the details, but in a Limited Brands filing with the SEC the company stated it received $32 million.
Boring gives Heasley high marks for turning around the Limited. “She’s real sharp and someone who has brought in more market research and focus,” he says.
Heasley is a demanding boss. “I ask a lot of questions and set goals, goals that are tough, but not impossible,” she says, adding she places a lot of faith and trust in her employees.
While her line of clothing is designed for women 25 to 35, Heasley says, “We know Tyler has friends and sisters and they all have mothers.” In other words, the Limited’s selection can appeal to women older than 35.
“I wear our brand to show how stylish and versatile it is,” Heasley says, adding it’s fine to mix-and-match the line with some high-end attire. “I think our trousers and a Chanel jacket looks amazing.”
Can’t you just picture Tyler in this outfit?
Or maybe Kristin Kluskiewicz, a real-life Tyler Monroe. She’s 26, in sales for a financial services company and lives in
Allentown, Pennsylvania—and has been shopping regularly at the Limited for years. After Kluskiewicz e-mailed a complaint through the company’s website (she was concerned the clothes weren’t as durable as they had been), she received a call from Heasley and later was invited to the Limited’s New York design office to sit in on a meeting.
Afterward, Heasley sent Kluskiewicz a navy blue (her favorite color) denim suit as a thank you for her input. “You don’t normally think you can wear denim in a professional business atmosphere,” Klus-kiewicz says. “But they made it so sharp and sophisticated that I could wear it to work. And normally you worry about the fit of something, but I took it out of the box and it felt as if it had been sewn just for me.”
It’s a shame Tyler isn’t real, because it sounds as if she and Kristin could be BFFs and go on shopping trips to the Limited.
Steve Wartenberg is a freelance writer.