Limited Predicts First-Quarter Loss, Cuts 400 Jobs

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By Allison Abell Schwartz

Feb. 26 (Bloomberg) -- Limited Brands Inc., the owner of the Victoria’s Secret chain, predicted a first-quarter loss and cut 400 jobs as consumers reduce spending on lingerie.

The loss will be 7 cents to 12 cents a share, the Columbus, Ohio-based company said today. Eight analysts estimated profit of 2 cents a share, on average. Sales at stores open at least a year may decline by “high-single digits” on a percentage basis, executives said on a conference call with investors and analysts.

Saks Inc. and Macy’s Inc. are among retailers eliminating jobs to slash costs as declining home values and the highest unemployment in 16 years cause consumers to reduce spending. Limited is also suspending pay increases, reducing capital spending and slowing store growth, Chief Administrative Officer Martyn Redgrave said on the call.

“There is extraordinary uncertainty and lack of visibility in all of our businesses,” Redgrave said. “In this unprecedented environment, we are choosing to take aggressive actions.”

Limited fell 73 cents, or 8.2 percent, to $8.19 at 11:52 a.m. in New York Stock Exchange composite trading. The shares lost 11 percent this year before today.

Fourth-quarter net income dropped 96 percent to $16.1 million, or 5 cents a share, after a writedown on the value of its La Senza brand. Revenue fell 8.7 percent to $2.99 billion.

The retailer took a charge in the period for the elimination of about 10 percent of the jobs at its corporate headquarters. Most of the jobs cut at Limited Brands will remain on its payroll until March 7, spokeswoman Tammy Roberts Myers said in an e-mail.

Profit excluding the pretax impairment charge and severance costs was 68 cents a share, the company said. Fourteen analysts surveyed by Bloomberg estimated profit of 65 cents.

Full-year profit will be 60 cents to 85 cents, the company said. Fourteen analysts estimated profit of 88 cents, on average.

Limited’s 3,014 retail locations include Bath & Body Works and Henri Bendel as well as Victoria’s Secret.

To contact the reporter on this story: Allison Abell Schwartz in New York at aabell@bloomberg.net.

Last Updated: February 26, 2009 11:55 EST