SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
___________
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended January 31, 1998
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OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ______________ to ______________
Commission file number 1-8344
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THE LIMITED, INC.
-------------------------
(Exact name of registrant as specified in its charter)
Delaware 31-1029810
- ------------------------ ------------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
Three Limited Parkway, P.O. Box 16000, Columbus, Ohio 43216
- ----------------------------------------------------- --------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (614) 415-7000
--------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
---------------------- -----------------------------------------
Common Stock, $.50 Par Value The New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to the filing requirements for
the past 90 days. Yes X No
--------- ---------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
-----
Aggregate market value of the registrant's Common Stock held by non-affiliates
of the registrant as of April 17, 1998: $8,537,190,501.
Number of shares outstanding of the registrant's Common Stock as of April 17,
1998: 274,287,245.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the registrant's annual report to shareholders for the fiscal year
ended January 31, 1998 are incorporated by reference into Part I, Part II and
Part IV, and portions of the registrant's proxy statement for the Annual
Meeting of Shareholders scheduled for May 18, 1998 are incorporated by reference
into Part III.
PART I
ITEM 1. BUSINESS.
General.
The Limited, Inc., a Delaware corporation (including its subsidiaries, the
"Company"), is principally engaged in the purchase, distribution and sale of
women's apparel, lingerie, men's apparel, personal care products, children's
apparel and a wide variety of sporting goods. The Company operates an
integrated distribution system which supports its retail activities. These
activities are conducted under various trade names through the retail stores and
catalogue businesses of the Company. Merchandise is targeted to appeal to
customers in various market segments that have distinctive consumer
characteristics.
Description of Operations.
General.
- -------
As of January 31, 1998, the Company owned the following businesses: (1) Intimate
Brands, Inc. ("IBI") (a corporation in which the Company holds an 83% interest)
which consists of a retail lingerie business, a catalogue lingerie and women's
apparel business (Victoria's Secret Catalogue), and a personal care business,
(2) Abercrombie & Fitch Co. (a corporation in which the Company holds an 84%
interest), a men's and women's apparel business, (3) five women's retail apparel
businesses, and (4) the "Emerging" businesses which consist of a men's apparel
business, a children's apparel business and a sporting goods business. The
following chart reflects the retail businesses and the number of stores in
operation for each business at January 31, 1998 and February 1, 1997.
2
NUMBER OF STORES
RETAIL BUSINESSES --------------------------
- -----------------
January 31, February 1,
1998 1997
------------ ----------
Women's
- -------
Express 753 753
Lerner New York 746 784
Lane Bryant 773 832
The Limited 629 663
Henri Bendel 6 6
---------- ------------
Total Women's 2,907 3,038
Emerging
- --------
Structure 544 542
The Limited Too 312 308
Galyan's Trading Co. 11 9
---------- -------------
Total Emerging 867 859
Intimate Brands, Inc.
- ---------------------
Victoria's Secret Stores 789 736
Bath & Body Works 921 750
Cacique /**/ - 119
Penhaligon's/*/ - 4
---------- -------------
Total Intimate Brands, Inc. 1,710 1,609
Abercrombie & Fitch Co./***/ 156 127
- ---------------------- ---------- -------------
Total 5,640 5,633
========== =============
/*/ - Penhaligon's was sold in April 1997.
/**/ - Cacique was closed in January 1998.
/***/ - The Company expects to commence an offer of its A&F shares in exchange
for Limited common stock pursuant to which A&F will become an
independent public company.
The following table shows the changes in the number of retail stores operated by
the Company for the past five fiscal years:
Beginning End of
Fiscal Year of Year Acquired Opened Closed Year
----------- ----------- ----------- ---------- ----------- --------
1993 4,425 - 322 (124) 4,623
1994 4,623 - 358 (114) 4,867
1995 4,867 6 504 (79) 5,298
1996 5,298 - 470 (135) 5,633
1997 5,633 - 315 (308) 5,640
3
The Company also owns Mast Industries, Inc., a contract manufacturer and apparel
importer, and Gryphon Development, Inc. ("Gryphon") which is a subsidiary of
IBI. Gryphon creates, develops and contract manufactures a substantial portion
of the bath and personal care products sold by the Company.
During fiscal year 1997, the Company purchased merchandise from approximately
7,800 suppliers and factories located throughout the world. In addition to
purchases through Mast and Gryphon, the Company purchased merchandise in foreign
markets, with additional merchandise purchased in the domestic market, some of
which is manufactured overseas. No more than 5% of goods purchased originated
from any single manufacturer.
Most of the merchandise and related materials for the Company's stores is
shipped to the Company's distribution centers in the Columbus, Ohio area. The
Company uses common and contract carriers to distribute merchandise and related
materials to its stores. The Company's businesses generally have independent
distribution capabilities and no business receives priority over any other
business. There are no distribution channels between the retail businesses.
The Company's policy is to maintain sufficient quantities of inventory on hand
in its retail stores and distribution centers so that it can offer customers a
full selection of current merchandise. The Company emphasizes rapid turnover
and takes markdowns as required to keep merchandise fresh and current with
fashion trends.
The Company views the retail apparel market as having two principal selling
seasons, Spring and Fall. As is generally the case in the apparel industry, the
Company experiences its peak sales activity during the Fall season. This
seasonal sales pattern results in increased inventory during the Fall and
Christmas holiday selling periods. During fiscal year 1997, the highest
inventory level was $1.524 billion at the November 1997 month-end and the lowest
inventory level was $990 million at the December 1997 month-end.
Merchandise sales are paid for in cash, by personal check, and with credit cards
issued by third parties or credit cards issued by the Company's credit card
processing venture, Alliance Data Systems ("ADS"), for customers of Express,
Lerner New York, Lane Bryant, Limited, Henri Bendel, Victoria's Secret Stores,
Victoria's Secret Catalogue, Structure and Abercrombie & Fitch. ADS was formed
in part from World Financial Network National Bank ("WFNNB"), a wholly-owned
subsidiary of the Company prior to January 1996. At that time, a 60% interest
was sold to a New York investment firm, resulting in the formation of ADS, a
venture that provides private-label and bank card transaction processing and
database management services to retailers, including the Company's private-label
credit card operations. Further information regarding this transaction is
contained in Note 3 of the Notes to Consolidated Financial Statements included
in The Limited, Inc., 1997 Annual Report to Shareholders, portions of which are
annexed hereto as Exhibit 13 (the "1997 Annual Report") and is incorporated
herein by reference.
The Company offers its customers a liberal return policy stated as "No Sale is
Ever Final." The Company believes that certain of its competitors offer similar
credit card and service policies.
The following is a brief description of each of the Company's operating
businesses, including their respective target markets.
4
Intimate Brands, Inc. - is a leading specialty retailer of intimate apparel and
- ---------------------
personal care products, operating primarily under its Victoria's Secret and Bath
& Body Works brand names. Under the Victoria's Secret name, The Limited is the
leading mall-based specialty retailer of women's intimate apparel and related
products and a leading catalogue retailer of intimate and other women's apparel.
Victoria's Secret operates over 780 stores nationwide and in 1997 mailed
approximately 425 million catalogues. Under the Bath & Body Works name, The
Limited is the leading mall-based specialty retailer of personal care products.
Launched in 1990, Bath & Body Works operates over 920 stores nationwide.
Intimate Brands had net sales of $3.6 billion in 1997.
Express - is a leading specialty retailer of women's sportswear and accessories.
- -------
Express' strategy is to offer, under the Express brand, an exciting collection
of quality sportswear designed to appeal to a broad range of young-minded,
spirited women looking for the latest in current fashion. Launched in 1980,
Express had net sales of approximately $1.2 billion in 1997 and operated 753
stores in 48 states.
Lerner New York - is a leading mall-based specialty store retailer of value
- ---------------
priced women's apparel. The business's repositioned merchandising strategy is
to be the leading fashion-at-a-value women's specialty retailer offering its
customer a fashion-coordinated flexible wardrobe at opening price points.
Originally founded in 1918, Lerner New York was purchased by The Limited in
1985. Lerner New York had net sales of approximately $946 million in 1997 and
operated 746 stores in 45 states.
Lane Bryant - is the leading specialty store retailer of large-size women's
- -----------
apparel. The business targets fashion-conscious women who are seeking
moderately-priced clothing in sizes 14-28. Originally founded in 1900, Lane
Bryant was acquired by The Limited in 1982. The business had net sales of
approximately $907 million in 1997 and operated 773 stores in 46 states.
Limited - is one of the oldest and largest mall-based specialty store retailers.
- --------
In early 1995, the business repositioned its merchandising strategy to focus its
historically strong brand name on an "American Lifestyle" point of view,
targeting fashion-oriented women who prefer a classic and comfortable wardrobe
and seek consistency in style, taste, quality and fit. Founded in 1963, Limited
Stores had net sales of $776 million in 1997 and operated 629 stores in 46
states.
Structure - is a leading mall-based specialty retailer of men's clothing.
- ---------
Structure targets men with an active, outdoor-oriented lifestyle. In 1996,
Structure repositioned its strategy by returning to classic American casual
fashion. Structure operates 544 stores in 43 states and had net sales of $660
million in 1997.
Limited Too - established in 1987, sells casual clothes for girls up to fourteen
- -----------
years of age through 312 stores. Limited Too had net sales of $322 million in
1997.
Galyan's - is a rapidly-growing operator of full-line sporting goods and apparel
- --------
superstores in the Midwestern United States. Galyan's operates eleven stores in
four markets, targeting upscale sports enthusiasts. Acquired by The Limited in
July 1995, Galyan's had net sales of $160 million in 1997.
5
Henri Bendel - operates specialty stores which feature better, bridge and
- ------------
designer women's fashions in an exclusive, eclectic shopping environment. The
business was purchased by The Limited in 1988 and had net sales of approximately
$83 million in 1997. The Limited has announced that it will close five of its
six locations with the New York City store remaining open.
Abercrombie & Fitch Co. - is a rapidly growing specialty retailer that has
- ----------------------
created a focused and differentiated brand image based on quality, youthfulness
and classic American style. The business had net sales of $522 million in 1997
and operated 156 stores in 36 states. The Company expects to commence an offer
of its A&F shares in exchange for Limited common stock pursuant to which A&F
will become an independent public company.
Additional information about the Company's business, including its revenues and
profits for the last three years, plus selling square footage and other
information about each of the Company's operating businesses, is set forth under
the caption "Management's Discussion and Analysis" of the 1997 Annual Report and
is incorporated herein by reference.
COMPETITION.
The sale of apparel, lingerie, personal care products and sporting goods through
retail stores is a highly competitive business with numerous competitors,
including individual and chain fashion specialty stores, department stores and
discount retailers. Design, price, service, selection and quality are the
principal competitive factors in retail store sales. The Company's catalogue
business competes with numerous national and regional catalogue merchandisers.
Design, price, service, quality and catalogue presentation are the principal
competitive factors in catalogue sales.
The Company is unable to estimate the number of competitors or its relative
competitive position due to the large number of companies selling apparel and
personal care products at retail, both through stores and catalogues.
ASSOCIATE RELATIONS.
On January 31, 1998, the Company employed approximately 131,000 associates,
96,200 of whom were part-time. In addition, temporary associates are hired
during peak periods, such as the Christmas season.
ITEM 2. PROPERTIES.
The Company's business is principally conducted from office, distribution and
shipping facilities located in the Columbus, Ohio area. Additional facilities
are located in New York City, New York; Indianapolis, Indiana; Andover,
Massachusetts; Kettering, Ohio; Rio Rancho, New Mexico and London, England.
The distribution and shipping facilities owned by the Company consisted of nine
buildings located in the Columbus, Ohio area and, excluding office space,
comprised approximately 5.2 million square feet.
Substantially all of the retail stores owned by the Company are located in
leased facilities, primarily in shopping centers throughout the continental
United States. The leases expire at various dates principally between 1998 and
2018 and generally have renewal options.
Typically, when space is leased for a retail store in a shopping center, all
improvements, including
6
interior walls, floors, ceilings, fixtures and decorations, are supplied by the
tenant. In certain cases, the landlord of the property may provide a
construction allowance to fund all or a portion of the cost of improvements. The
cost of improvements varies widely, depending on the size and location of the
store. Rental terms for new locations usually include a fixed minimum rent plus
a percentage of sales in excess of a specified amount. Certain operating costs
such as common area maintenance, utilities, insurance, and taxes are typically
paid by tenants.
ITEM 3. LEGAL PROCEEDINGS.
The Company is a defendant in a variety of lawsuits arising in the ordinary
course of business.
On November 13, 1997, the United States District Court for the Southern District
of Ohio, Eastern Division, dismissed with prejudice an amended complaint that
had been filed against the Company and certain of its subsidiaries by the
American Textile Manufacturers Institute ("ATMI"), a textile industry trade
association. The amended complaint alleged that the defendants violated the
federal False Claims Act by submitting false country of origin records to the US
Customs Service. On November 26, 1997, ATMI served a motion to alter or amend
judgement and a motion to disqualify the presiding judge and to vacate the order
of dismissal. The motion to disqualify was denied on December 22, 1997, but as
a matter of his personal discretion, the presiding judge elected to recuse
himself from further proceedings and this matter has been transferred to another
judge of the United States District Court for the Southern District of Ohio. On
January 8, 1998, ATMI filed a second motion to vacate and a motion for leave to
file a second amended complaint. The Company has vigorously opposed all of the
pending motions.
Although it is not possible to predict with certainty the eventual outcome of
any litigation, in the opinion of management, the foregoing proceedings are not
expected to have a material adverse effect on the Company's financial position
or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
7
SUPPLEMENTAL ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT.
Set forth below is certain information regarding the executive officers of the
Company as of January 31, 1998.
Leslie H. Wexner, 60, has been Chairman of the Board of Directors of the Company
for more than five years and its President and Chief Executive Officer since he
founded the Company in 1963.
Kenneth B. Gilman, 51, has been Vice Chairman and Chief Administrative Officer
of the Company since June 1997. Mr. Gilman was the Chief Financial Officer of
the Company from June 1993 to August 1997. Mr. Gilman was the Executive Vice
President and Chief Financial Officer of the Company for more than five years
prior thereto.
V. Ann Hailey, 47, has been Chief Financial Officer of the Company since August
1997. Ms. Hailey was Senior Vice President and Chief Financial Officer for
Pillsbury from August, 1994 to August 1997.
Martin Trust, 63, has been President of Mast Industries, Inc., a wholly-owned
subsidiary of the Company, for more than five years.
Arnold F. Kanarick, 57, has been Executive Vice President and Chief Human
Resources Officer since October 1992.
All of the above officers serve at the pleasure of the Board of Directors of the
Company.
8
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Information regarding markets in which the Company's common stock was traded
during fiscal years 1997 and 1996, approximate number of holders of common
stock, and quarterly cash dividend per share information of the Company's common
stock for the fiscal years 1997 and 1996 is set forth under the caption "Market
Price and Dividend Information" on page 19 of the 1997 Annual Report and is
incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
Selected financial data is set forth under the caption "Financial Summary" on
page 3 of the 1997 Annual Report and is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Management's discussion and analysis of financial condition and results of
operations is set forth under the caption "Management's Discussion and Analysis"
on pages 4 through 10 of the 1997 Annual Report and is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Consolidated Financial Statements of the Company and subsidiaries, the Notes
to Consolidated Financial Statements and the Report of Independent Accountants
are set forth in the 1997 Annual Report and are incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding directors of the Company is set forth under the captions
"ELECTION OF DIRECTORS - Nominees and Directors", "- Business Experience", "-
Information Concerning the Board of Directors" and "- Security Ownership of
Directors and Management" on pages 1 through 6 of the Company's proxy statement
for the Annual Meeting of Shareholders to be held May 18, 1998 (the "Proxy
Statement") and is incorporated herein by reference. Information regarding
compliance with Section 16(a) of the Securities Exchange Act of 1934, as amended
is set forth under the caption "EXECUTIVE COMPENSATION - Section 16(a)
Beneficial Ownership Reporting Compliance" on page 13 of the Proxy Statement and
is incorporated herein by reference. Information regarding executive officers
is set forth herein under the caption "SUPPLEMENTAL ITEM. EXECUTIVE OFFICERS OF
THE REGISTRANT" in Part I.
9
ITEM 11. EXECUTIVE COMPENSATION.
Information regarding executive compensation is set forth under the caption
"EXECUTIVE COMPENSATION" on pages 9 through 13 of the Proxy Statement and is
incorporated herein by reference. Such incorporation by reference shall not be
deemed to specifically incorporate by reference the information referred to in
Item 402(a)(8) of Regulation S-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Information regarding the security ownership of certain beneficial owners and
management is set forth under the captions "ELECTION OF DIRECTORS - Security
Ownership of Directors and Management" on pages 5 and 6 of the Proxy Statement
and "PRINCIPAL HOLDERS OF VOTING SECURITIES" on page 19 of the Proxy Statement
and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information regarding certain relationships and related transactions is set
forth under the captions "ELECTION OF DIRECTORS - Business Experience" on pages
2 and 3 of the Proxy Statement and "ELECTION OF DIRECTORS - Certain
Relationships and Related Transactions" on pages 7 and 8 of the Proxy Statement
and is incorporated herein by reference.
10
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a)(1) List of Financial Statements.
----------------------------
The following consolidated financial statements of The Limited, Inc. and
Subsidiaries and the related notes are filed as a part of this report
pursuant to ITEM 8:
Consolidated Statements of Income for the fiscal years ended January 31,
1998, February 1, 1997 and February 3, 1996.
Consolidated Statements of Shareholders' Equity for the fiscal years ended
January 31, 1998, February 1, 1997 and February 3, 1996.
Consolidated Balance Sheets as of January 31, 1998 and February 1, 1997.
Consolidated Statements of Cash Flows for the fiscal years ended January
31, 1998, February 1, 1997 and February 3, 1996.
Notes to Consolidated Financial Statements.
Report of Independent Accountants.
(a)(2) List of Financial Statement Schedules.
-------------------------------------
The following consolidated financial statement schedule of The Limited,
Inc. and subsidiaries is filed as part of this report pursuant to ITEM
14(d):
II. Valuation and Qualifying Accounts
All other schedules are omitted because the required information is either
presented in the financial statements or notes thereto, or is not
applicable, required or material.
(a)(3) List of Exhibits
----------------
3. Articles of Incorporation and Bylaws.
3.1. Certificate of Incorporation of the Company incorporated by
reference to Exhibit 3.4 to the Company's Annual Report on Form
10-K for the fiscal year ended January 30, 1988.
3.2. Restated Bylaws of the Company incorporated by reference to
Exhibit 3.2 to the Company's Annual Report on Form 10-K for the
fiscal year ended February 2, 1991 (the "1990 Form 10-K").
4. Instruments Defining the Rights of Security Holders.
11
4.1. Copy of the form of Global Security representing the Company's
7 1/2% Debentures due 2023, incorporated by reference to
Exhibit 1 to the Company's Current Report on Form 8-K dated
March 4, 1993.
4.2. Conformed copy of the Indenture dated as of March 15, 1988
between the Company and The Bank of New York, incorporated by
reference to Exhibit 4.1(a) to the Company's Current Report on
Form 8-K dated March 21, 1989.
4.3. Copy of the form of Global Security representing the Company's
8 7/8% Notes due August 15, 1999, incorporated by reference to
Exhibit 4.1 to the Company's Current Report on Form 8-K dated
August 14, 1989.
4.4. Copy of the form of Global Security representing the Company's
9 1/8% Notes due February 1, 2001, incorporated by reference to
Exhibit 4.1 to the Company's Current Report on Form 8-K dated
February 6, 1991.
4.5. Copy of the form of Global Security representing the Company's
7.80% Notes due May 15, 2002, incorporated by reference to the
Company's Current Report on Form 8-K dated February 27, 1992.
4.6. Proposed form of Debt Warrant Agreement for Warrants attached
to Debt Securities, with proposed form of Debt Warrant
Certificate incorporated by reference to Exhibit 4.2 to the
Company's Registration Statement on Form S-3 (File no. 33-
53366) originally filed with the Securities and Exchange
Commission (the "Commission") on October 16, 1992, as amended
by Amendment No. 1 thereto, filed with the Commission on
February 23, 1993 (the "1993 Form S-3").
4.7. Proposed form of Debt Warrant Agreement for Warrants not
attached to Debt Securities, with proposed form of Debt Warrant
Certificate incorporated by reference to Exhibit 4.3 to the
1993 Form S-3.
4.8. Credit Agreement dated as of September 25, 1997 among the
Company, Morgan Guaranty Trust Company of New York and the
banks listed therein, incorporated by reference to Exhibit 4.8
to the Company's Quarterly Report on Form 10-Q for the quarter
ended November 1, 1997.
12
10. Material Contracts.
10.1. The 1987 Stock Option Plan of The Limited, Inc., incorporated
by reference to Exhibit 28(a) to the Form S-8.
10.2. Officers' Benefits Plan incorporated by reference to Exhibit
10.4 to the Company's Annual Report on Form 10-K for the
fiscal year ended January 28, 1989 (the "1988 Form 10-K").
10.3. The Limited Deferred Compensation Plan incorporated by
reference to Exhibit 10.4 to the 1990 Form 10-K.
10.4. Form of Indemnification Agreement between the Company and the
directors and officers of the Company, incorporated by
reference to Exhibit A to the Company's definitive proxy
statement dated April 18, 1988 for the Company's 1988 Annual
Meeting of Shareholders held May 23, 1988.
10.5. Schedule of directors and officers who became parties to
Indemnification Agreements effective May 23, 1988,
incorporated by reference to Exhibit 19.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended October
29, 1988.
10.6. Reserved for future use.
10.7. Supplemental schedule of directors and officers who became
parties to Indemnification Agreements incorporated by
reference to Exhibit 19.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended August 1, 1992.
10.8. Supplemental schedule of officer who became party to an
Indemnification Agreement effective November 16, 1992
incorporated by reference to Exhibit 10.9 to the Company's
Annual Report on Form 10-K for the year ended January 30,
1993.
10.9. The 1993 Stock Option and Performance Incentive Plan of the
Company, incorporated by reference to Exhibit 4 to the
Company's Registration Statement on Form S-8 (File No. 33-
49871).
10.10. Supplemental schedule of director who became party to an
Indemnification Agreement effective January 27, 1996
incorporated by reference to Exhibit 10.12 to the 1995 Form
10-K.
10.11. Reserved for future use.
10.12. Contingent Stock Redemption Agreement dated as of January 26,
1996 among the Company, Leslie H. Wexner and The Wexner
Children's Trust, incorporated by reference to Exhibit 10.13
to the 1996 Form 10-K.
13
10.13. Amendment dated July 19, 1996 to the Contingent Stock
Redemption Agreement dated as of January 26, 1996 among the
Company, Leslie H. Wexner and The Wexner Children's Trust,
incorporated by reference to Exhibit 10.14 to the 1996 Form
10-K.
10.14. Reserved for future use.
10.15. Reserved for future use.
10.16. The 1997 Restatement of The Limited, Inc. 1993 Stock Option
and Performance Incentive Plan incorporated by reference to
Exhibit B to the Company's Proxy Statement dated April 14,
1997.
10.17. The Limited, Inc. 1996 Stock Plan for Non-Associate Directors
incorporated by reference to Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended November
2, 1996.
10.18. The Limited, Inc. Incentive Compensation Performance Plan
incorporated by reference to Exhibit A to the Company's Proxy
Statement dated April 14, 1997.
10.19. Reserved for future use.
10.20. Employment Agreement by and between The Limited, Inc and
Kenneth B. Gilman dated as of May 20, 1997 with exhibits.
10.21. Employment Agreement by and between The Limited, Inc. and
Arnold F. Kanarick dated as of May 20, 1997 with exhibits.
10.22. Employment Agreement by and between The Limited, Inc. and
Martin Trust dated as of May 20, 1997 with exhibits.
12. Statement re: Computation of Ratio of Earnings to Fixed Charges.
13. Excerpts from the 1997 Annual Report to Shareholders including
"Financial Summary", "Management's Discussion and Analysis" and
"Financial Statements and Notes" on pages 3 through 19.
21. Subsidiaries of the Registrant.
23. Consent of Independent Accountants.
24. Powers of Attorney.
14
27. Financial Data Schedule.
99. Annual Report of The Limited, Inc. Savings and Retirement Plan.
(b) Reports on Form 8-K.
-------------------
No reports on Form 8-K were filed during the fourth quarter of fiscal
year 1997.
(c) Exhibits.
--------
The exhibits to this report are listed in section (a)(3) of Item 14 above.
(d) Financial Statement Schedule.
----------------------------
The financial statement schedule filed with this report is listed in
section (a) (2) of Item 14 above.
15
SIGNATURES
Pursuant to the requirements of Section 13 or l5(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: April 29, 1998
THE LIMITED, INC.
(registrant)
By /s/ V. ANN HAILEY
--------------------
V. Ann Hailey,
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated on January 30, 1998:
Signature Title
--------- -----
/s/ LESLIE H. WEXNER/*/ Chairman of the Board of Directors,
- ---------------------------
Leslie H. Wexner President and Chief Executive Officer
/s/ KENNETH B. GILMAN/*/ Director, Vice Chairman and Chief
- ---------------------------
Kenneth B. Gilman Administrative Officer
/s/ ABIGAIL S. WEXNER/*/ Director
- ---------------------------
Abigail S. Wexner
/s/ MARTIN TRUST/*/ Director
- ---------------------------
Martin Trust
/s/ EUGENE M. FREEDMAN/*/ Director
- ---------------------------
Eugene M. Freedman
/s/ E. GORDON GEE/*/ Director
- ---------------------------
E. Gordon Gee
/s/ DAVID T. KOLLAT/*/ Director
- ---------------------------
David T. Kollat
/s/ CLAUDINE MALONE/*/ Director
- ---------------------------
Claudine Malone
16
/s/ LEONARD A. SCHLESINGER/*/ Director
- ------------------------------
Leonard A. Schlesinger
/s/ DONALD B. SHACKELFORD/*/ Director
- ------------------------------
Donald B. Shackelford
/s/ ALLAN R. TESSLER/*/ Director
- -----------------------------
Allan R. Tessler
/s/ RAYMOND ZIMMERMAN/*/ Director
- -----------------------------
Raymond Zimmerman
/*/The undersigned, by signing his name hereto, does hereby sign this report on
behalf of each of the above-indicated directors of the registrant pursuant to
powers of attorney executed by such directors.
By /s/ KENNETH B. GILMAN
---------------------------
Kenneth B. Gilman
Attorney-in-fact
17
[LETTERHEAD OF COOPERS & LYBRAND APPEARS HERE]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
of The Limited, Inc.
We have audited the consolidated financial statements of The Limited, Inc. and
Subsidiaries as of January 31, 1998 and February 1, 1997, and for each of the
three fiscal years in the period ended January 31, 1998, which financial
statements are included on pages 11 through 18 of the 1997 Annual Report to
shareholders of The Limited, Inc. and incorporated by reference herein. We have
also audited the financial statement schedule for the fiscal year in the period
ended February 3, 1996, listed in Item 14(a)(2) of this Form 10-K. These
financial statements and financial statement schedule are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of The Limited, Inc.
and Subsidiaries as of January 31, 1998 and February 1, 1997, and the
consolidated results of their operations and their cash flows for each of the
three fiscal years in the period ended January 31, 1998 in conformity with
generally accepted accounting principles. In addition, in our opinion, the
financial statement schedule for the fiscal year in the period ended February 3,
1996 referred to above, when considered in relation to the basic financial
statements taken as a whole, present fairly, in all material respects, the
information required to be included therein.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
February 20, 1998
18
Schedule II
-----------
THE LIMITED, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE FISCAL YEAR ENDED
FEBRUARY 3, 1996
(THOUSANDS)
Balance at Charged to Balance at
Beginning of Costs and Sale of End of
Fiscal Year Expenses Deductions WFNNB Fiscal Year
--------------- ------------- ------------- ------------ --------------
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
Fiscal year ended February 3, 1996 $44,946 91,424 (90,134)(A) (46,236)(B) $ -
============== ============== ============== ============== ==============
(A) - Write-offs, net of recoveries
(B) - The Company sold a 60% interest in WFNNB in 1995;
therefore, it is no longer a consolidated subsidiary of the
Company. See Note 3 to the Consolidated Financial
Statements for further information.
EXHIBIT INDEX
-------------
Exhibit No. Document
- ----------- -------------------------------
10.20 Employment Agreement by and between The Limited, Inc.
and Kenneth B. Gilman dated as of May 20, 1997 with exhibits.
10.21 Employment Agreement by and between The Limited, Inc.
and Arnold F. Kanarick dated as of May 20, 1997 with exhibits.
10.22 Employment Agreement by and between The Limited, Inc.
and Martin Trust dated as of May 20, 1997 with exhibits.
12 Statement re: Computation of Ratio of Earnings to Fixed Charges.
13 Excerpts from the 1997 Annual Report to Shareholders including
"Financial Summary", "Management's Discussion and Analysis" and
"Financial Statements and Notes" on pages 3 through 19.
21 Subsidiaries of the Registrant.
23 Consent of Independent Accountants.
24 Powers of Attorney.
27 Financial Data Schedule.
99 Annual Report of The Limited, Inc. Savings and Retirement Plan.