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Filed by The Limited, Inc.
Pursuant to Rule 425 under the
Securities Act of 1933 and deemed
Filed pursuant to Rule 14a-12 under
the Securities Exchange Act of 1934
Subject Company: Intimate Brands, Inc.
Commission File No. 1-13814
Date: March 7, 2002
The following is the transcript of a recorded conference call which
took place on Thursday, March 7, 2002 regarding the announcement by Intimate
Brands, Inc. of February 2002 sales results.
INTIMATE BRANDS, INC.
February Sales Call
March 7, 2002
7:00 a.m. (EST)
GOOD MORNING EVERYONE. THIS IS DEBBIE MITCHELL, VICE PRESIDENT OF
COMMUNICATIONS AND INVESTOR RELATIONS FOR INTIMATE BRANDS. THIS IS INTIMATE
BRAND'S FEBRUARY SALES REPORT FOR THE FOUR WEEK PERIOD ENDING SATURDAY, MARCH
2, 2002.
BEFORE I BEGIN, AS A MATTER OF FORMALITY, I DO NEED TO REMIND YOU THAT ANY
FORWARD LOOKING COMMENTS I MAKE TODAY ARE SUBJECT TO THE SAFE HARBOR STATEMENT
FOUND IN OUR SEC FILINGS.
NOW, A REVIEW OF THE RESULTS FOR INTIMATE BRANDS OVERALL:
SALES FOR THE FOUR WEEKS ENDED MARCH 2, 2002 WERE $349.6 MILLION, COMPARED TO
$338.1 MILLION FOR THE FOUR WEEKS ENDED MARCH 3, 2001. COMPARABLE STORE SALES
WERE UP 1% FOR THE PERIOD VERSUS A NEGATIVE 5% COMP LAST YEAR. OUR MERCHANDISE
MARGIN WAS UP SLIGHTLY VERSUS
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LAST YEAR AND INVENTORIES WERE DOWN 2 % ON A COST PER SQUARE FOOT BASIS.
NOW LET'S LOOK AT THE PERFORMANCE OF EACH BUSINESS:
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VICTORIA'S SECRET STORES & BEAUTY
- ---------------------------------
COMPARABLE STORE SALES FOR FEBRUARY WERE UP 7% COMPARED TO LAST YEAR'S COMP
SALES OF A -6%. MERCHANDISE MARGINS WERE UP. INVENTORIES WERE DOWN VERSUS LAST
YEAR ON A COST PER SQUARE FOOT BASIS.
THE VERY SEXY BRA CONTINUED TO ELICIT STRONG CONSUMER RESPONSE...AND ALONG WITH
A GIFTABLE SLEEPWEAR ASSORTMENT DROVE SALES DURING THIS VALENTINE'S DAY MONTH.
FOR THE BEAUTY BUSINESS, THE PRESTIGE FRAGRANCE PORTFOLIO, INCLUDING THE MEN'S
FRAGRANCE, "VERY SEXY FOR HIM", COMBINED WITH A STRONG RESPONSE TO PROMOTIONAL
PRICING ON GARDEN PRODUCTS DROVE DOUBLE DIGIT COMP INCREASES IN FEBRUARY.
FOR MARCH AT THE LINGERIE STORES, YOU'LL BE SEEING A "BODY BY VICTORIA" MEGA
EVENT FEATURING THE FULL LINE OF BODY BY VICTORIA PRODUCTS - AS WELL AS A NEW
FULL COVERAGE STYLE BRA WITH AN EXPANDED SIZE ASSORTMENT. BODY BY VICTORIA TV
ADVERTISING WHICH BEGAN MARCH 5TH, PRINT ADS AND A DIRECT MAIL CAMPAIGN SUPPORT
THIS EVENT.
THE BEAUTY BUSINESS IS FEATURING THE "Pink" FINE FRAGRANCE COLLECTION..."PINK"
CELEBRATES ITS FIRST YEAR ANNIVERSARY THIS MONTH BY INTRODUCING "PINK" BLUSHING
LUXE LOTION.
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VICTORIA'S SECRET DIRECT
- ------------------------
SALES HERE WERE DOWN 7% TO LAST YEAR. MERCHANDISE MARGINS WERE FLAT AND
INVENTORIES WERE DOWN.
SALES IN THE FIRST FIVE BOOKS OF THE SPRING SEASON, AND THE INTERNET BUSINESS
WERE UP IN FEBRUARY VERSUS LAST YEAR. HOWEVER, THIS WAS MORE THAN OFFSET BY
WEAK RESPONSE TO SALE BOOKS FEATURING LAST FALL'S MERCHANDISE.
THE GOOD NEWS IS THAT THE DIRECT BUSINESS IS CONTINUING TO GET GOOD TRACTION IN
ITS MAJOR FOCUS AREAS IN BOTH LINGERIE AND CLOTHING.
BATH & BODY WORKS
- -----------------
AT BATH & BODY WORKS, FEBRUARY COMPS WERE DOWN 8%. LAST YEAR COMPS WERE DOWN
3%. THE MERCHANDISE MARGIN WAS FLAT. INVENTORIES ON A COST PER SQUARE FOOT
BASIS WERE UP MODESTLY.
AROMATHERAPY AND TRUE BLUE SPA DID WELL IN THE MONTH AND WE WERE PLEASED WITH
CUSTOMER REACTION TO THE LAUNCH OF A NEW RESTORATIVE HAIR LINE. THE SPA AND THE
NEW HAIR LINE WILL BE FEATURED THROUGH MID-MARCH.
MID-MONTH, A NEW FLOORSET WILL BE DEVOTED TO AROMATHERAPY, AS THE BUSINESS
CONTINUES TO EMPHASIZE TRIAL OF THIS IMPORTANT NEW PRODUCT CATEGORY.
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SUMMARY
SO, IN SUMMARY, WHILE WE WERE PLEASED WITH FEBRUARY OVERALL, HISTORY HAS SHOWN
THAT FEBRUARY IS NOT PREDICTIVE OF THE SPRING SEASON.
AS WE NOTED IN THE FOURTH QUARTER EARNINGS CALL LAST WEEK, THE COMPANY EXPECTS
THE ECONOMIC AND RETAIL ENVIRONMENT TO CONTINUE TO BE CHALLENGING IN THE FIRST
HALF OF 2002.
I ALSO WANT TO NOTE THAT WE DO HAVE THE EASTER SHIFT IMPACT IN MARCH AND APRIL.
MARCH COMPS WILL BENEFIT FROM THIS SHIFT BUT APRIL COMPS WILL BE NEGATIVELY
IMPACTED. FOR THE FULL QUARTER, AS WE INDICATED LAST WEEK, WE EXPECT COMPARABLE
STORE SALES TO BE ABOUT FLAT FOR INTIMATE BRANDS. VICTORIA'S SECRET COMPS
SHOULD BE UP IN THE MID-SINGLE DIGITS, AND BATH & BODY WORKS' COMPS SHOULD BE
DOWN HIGH SINGLE DIGITS.
THANKS AGAIN FOR YOUR INTEREST IN INTIMATE BRANDS.
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Forward Looking Statements
This communication contains certain "forward-looking statements"
within the meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, including, among others, estimates of fiscal
year 2001 and 2002 results. Investors are cautioned that such forward looking
statements are subject to risks and uncertainties, many of which are beyond The
Limited's control. Accordingly, actual results may differ materially from those
expressed or implied in any such forward looking statements. Words such as
"estimate," "project," "plan," "believe," "expect," "anticipate," "intend" and
similar expressions may identify forward-looking statements.
The following factors, among others, in some cases have affected and
in the future could affect The Limited's (including, Intimate Brands')
financial performance and actual results and could cause actual results for
2001, 2002 and beyond to differ materially from those expressed or implied in
any forward-looking statements included in this press release and related
conference call: changes in consumer spending patterns, consumer preferences
and overall economic conditions; the potential impact of national and
international security concerns on the retail environment; the impact of
competition and pricing; changes in weather patterns; political stability;
postal rate increases and charges; paper and printing costs; risks associated
with the seasonality of the retail industry; risks related to consumer
acceptance of the products sold and the ability to develop new merchandise; the
ability to retain, hire and train key personnel; risks associated with the
possible inability of manufacturers to deliver products in a timely manner;
risks associated with relying on foreign sources of production and availability
of suitable store locations on appropriate terms. In addition, a number of
risks relate to the offer and the merger, including declines in the value of
the consideration offered because the exchange ratio is fixed; the risks and
liabilities associated with The Limited's non-Intimate Brands businesses that
are different from those associated with Intimate Brands' businesses; and the
risk that the anticipated benefits of the transaction will not be achieved.
Investors should read The Limited's prospectus and proxy statement
relating to the proposed exchange offer and merger and the documents
incorporated therein for a more detailed discussion of these risks and
uncertainties. The Limited is under no obligation and does not intend to update
any of these forward-looking statements, even if experience or future charges
make it clear that any proposed results experienced or implied therein will not
be realized.
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Additional Information
In connection with the proposed exchange offer, The Limited, Inc. has
filed an exchange offer prospectus and a proxy statement with the Securities
and Exchange Commission. INVESTORS AND STOCKHOLDERS ARE ADVISED TO READ THESE
AND ALL RELATED DOCUMENTS BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors
and stockholders may obtain a free copy of the exchange offer prospectus, the
proxy statement and related documents from the Securities and Exchange
Commission's web site at http://www.sec.gov. Free copies of these documents may
also be obtained from The Limited by directing a request to The Limited, Inc.,
Investors Relations, Three Limited Parkway, Columbus, Ohio 43216, (614)
415-7076.
The Limited and its directors, executive officers and other members of
its management and employees may be soliciting proxies from its stockholders in
connection with the proposed transaction. Information concerning The Limited's
participants in the solicitation is contained in a filing made by The Limited
with the Securities and Commission pursuant to Rule 14a-12 on February 4, 2002.