The Limited May Spin Off Divisions

The Limited Inc. hopes to show off the lace that’s been buttoned up under its stodgy women’s clothing divisions.

The company, which owns the Victoria’s Secret lingerie chain, said Tuesday that it’s considering a restructuring plan to create two new publicly-held companies. It’s also entertaining the sale of a majority interest in its fast-growing credit card business.

Analysts said the plan is designed to show off the company’s lingerie business, which is thriving.

One of the new companies likely would be made up of: Victoria’s Secret Stores and Catalogue, Bath & Body Works, Cacique, Penhaligon’s and Gryphon, chairman Leslie Wexner said in a news release.

The other probably would contain the women’s apparel businesses: Express, The Limited, Lerner New York and Lane Bryant.

“The feeling is that the parts are worth more than the whole,” said Joseph Ronning, an analyst with Brown Brothers, Harriman in New York.

“The Victoria Secret stuff would sell at a big premium, while the company as a whole is selling at a discount,” Ronning said.

Terence McEvoy, with Janney Montgomery Scott Inc. in New York, agreed with the move. “This is a very positive move to unlock some hidden assets in the company,” McEvoy said.

Under the proposed restructuring, 10 to 15 percent of the new companies would be sold to the public. The Limited would retain 85 to 90 percent of the companies.

New ventures and existing divisions Structure, Abercrombie & Fitch Co., The Limited Too, Henri Bendel, and Mast Industries would remain wholly owned by Limited, Wexner said.

Proceeds from all the stock sales would be distributed to shareholders, he said.

“They’re looking at a way to enhance shareholder value, which is something they have not done a good job of recently,” McEvoy said.

The investment firms Lazard Freres and Goldman Sachs & Co. were advising Limited in the restructuring.