"When I go to heaven, I'll be labeled a buyer -- a sweater buyer," said Leslie H. Wexner, chairman of The Limited Inc. "I wouldn't demean myself by just being an executive."
That self-assessment may seem modest for the 47-year-old, self-made millionaire. By all accounts, his chain of flashy, brassy stores -- named for their carefully chosen, limited selection of women's sportswear -- has become one of the fastest-growing and most successful retail operations in the country.
But retailers and financial analysts agree that Wexner's simple characterization of himself well may be the secret to his success.
"I think The Limited is one of the unique companies in retailing which is doing everything right," said Alan Pennington, president of Pennington Associates, a retail consulting firm. "It's a terrific retail company because it is a better anticipator and reader of the fashion scene for the customer than almost anybody else."
"Wexner is a merchant, not an accountant," said a manufacturer who declined to be named. "Most department stores around the country are run by accountants who'd rather look at numbers than fashion. Wexner's merchant orientation helps explain his success."
By almost any measure, that success is remarkable. In the 22 years since Wexner opened his first Limited Store in Columbus, Ohio, with a $5,000 loan from his aunt, he has built a specialty retail company with more than 1,400 stores and $1.3 billion in annual sales. In 1984, a year when many other retailers' profits were eroded by sluggish sales, The Limited's profits increased by 30 percent to reach $92.5 million.
Today, the chain -- still based in Columbus -- owns and operates not only The Limited Stores but also The Limited Express, geared to the teen-age market; Lane Bryant and Sizes Unlimited, both selling large-sized women's apparel; and Victoria's Secret, specializing in lingerie. Additionally, the company owns Mast Industries, an apparel contractor that manufactures and imports women's apparel not just for the The Limited but for other retailers as well.
This week, the chain is expected to add another 800 stores to its holdings when it completes its announced $300 million acquisition of Lerner Stores, a budget chain that sells women's apparel. With that acquisition, the store's annual sales will total more than $2 billion.
Even though The Limited company faces a challenge in digesting the Lerner stores, its fifth acquisition in less than three years, Wexner does not intend to sit still.
"I see us as a major force in retailing," Wexner said, in an interview in his Manhattan apartment overlooking Central Park. "In terms of a lifetime business, I would like the business to be to the retail industry what IBM is to industrial products. I would like to build a great business just like IBM founder Tom Watson built."
A few years ago, remarks like these would have been summarily dismissed by Wall Street and retailing executives. Today, few are laughing at Wexner. Instead, analysts and industry officials speak glowingly and enthusiastically about The Limited and Wexner, with most calling him a "retailing genius."
"Their merchandising is second to none," said Terence J. McEvoy, an analyst with Mabon, Nugent & Co. "They have a clear definition of what each division is attempting to do. That's not typical in retailing."
"I think it's the finest company in specialty retailing, without a doubt, and Wexner is the finest merchandiser in the country," said Robert A. Corea, an analyst with The Ohio Co. Because Corea is based in The Limited's hometown of Columbus, he keeps closer tabs on the company than most other analysts.
"Wexner knows merchandise better than any other retailer, and he knows how to market it," Corea said, pointing to The Limited's recent introduction of its Forenza private label. For months before these large knit sweaters appeared in Limited Stores, there were large bright signs in the windows saying the latest Italian knit would arrive shortly.
Today, several months after the sweaters have arrived, there are signs all over the store noting that "Athentic Forenza" is "finally in America." Yet, Corea points out, most customers do not know that Forenza is The Limited's own private label and hasn't been sold in Italy. What's more, although some of the sweaters are made in Italy, most come from the Far East, Corea said. But by its marketing and bold displays of the sweaters, Forenza has become one of the hottest-selling lines in the country.
Additionally, The Limited "has a marked ability to take a poor operation and turn it into a successful one," Corea said. When The Limited bought Lane Bryant in 1982, analysts criticized it as an imprudent buy: Lane Bryant had been losing money for years, and many retailers had turned down the opportunity to buy the chain.
Within months, The Limited started closing the unprofitable stores and cutting costs, partly by trimming staff. Wexner also phased out several merchandise lines such as sleepwear, robes and shoes, while introducing more fashion to the clothes he did sell to concentrate on a more youthful market.
"The success of the turnaround has been obvious in that Lane Bryant has just completed the most successful year in its history," Corea noted.
At the same time, analysts predict Wexner will not lose sight of the markets he has closely targeted. "More than any other retailing organization I can think of, The Limited is very market-oriented," said Louis W. Stern, executive director of the Marketing Science Institute. While most retailers react to market trends as they develop, The Limited "really looks at the consuming marketplace and figures out what it will be and what its position should be in that marketplace and then plays to it," Stern contended.
According to Stern and other analysts, the outstanding example of that orientation was the company's early realization that the growth in the women's apparel market was not in the teen-aged, junior market -- the target most retailers were trying to reach -- but in clothing for the 20- to 40-year-old. As a result, The Limited changed its merchandise mix long before other retailers reached similar conclusions.
Then in 1982, while other retailers were trying to reach the older career woman, The Limited concluded that there was still money to be made in the teen-age market. So it created a new store, The Limited Express, to sell sportswear to the 15- to 25-year-old.
In so doing, The Limited has concluded that, unlike department stores, it doesn't want to reach every woman, Pennington noted. Instead, "They have narrowed their focus and stay pretty true to that," he said. "When a 50-year-old walks into one of their stores and says 'This is disgusting,' they rejoice."
Wexner is pleased that the analysts finally have come to like his company. And he noted that, given the sharp appreciation in the company's stock, "If they didn't speak highly of us, I'd suspect them.
"Analysts like to believe in fairy tales," he added. "We're doing very well now, so they like us. But we will do bad one day -- I don't know when, but even the best-run companies hit funny cycles."
Wexner's chief concern is how well his company can handle the growth it is undergoing and the growth he has planned for it. "We can raise the money, but not grow the people fast enough," he said. "I worry about that. But hopefully, we have built our foundation well," he added, knocking for luck on his mahogany desk.
The key to the company's foundation is that every one of its divisions is led by a merchant, Wexner asserted. "I avoid -- and will scrupulously avoid -- putting CPAs in as chief executive officers. . . . There was a big notion in the 1960s that, if you were a good manager, you could run anything. I don't believe that. I think that a lot of businesses that are having problems now are run by people who don't have high skills in the business they are running."
For retailers, that means having merchants and buyers at the helm. "I'm very proud to be a merchant," he said. "I'm more apt to sit down with division executives and review last month's selling -- what did sell, and what do they think will sell next month -- than talk about last month's telephone expenses. . . . I can sit down with a pencil and design a store. I'm not uncomfortable going into a showroom and picking a style and buying a line . . . . There's very few retailers who can do that."
What does the customer want? "What they don't have," Wexner replied. "You have to understand that no one has to buy anything. On a utility basis, everybody has enough clothing in their closets to last them 100 years. So the issue in retailing is to create a demand to stimulate people to buy."
Wexner and his associates spend most of their lives trying to create that demand. When he travels abroad, instead of taking pictures of the foreign sights, for example, he ends up taking pictures of store signs, store fronts and stores. Although he denies he is a workaholic, Wexner reveals in the next breath: "I'm a very difficult person to live with because I never feel that I work hard. I never have any sense of accomplishment. I'm on to the next event, and I really don't take time to smell the roses."
Wexner is not the only workaholic in the company, according to C. William Ress, chairman of a Columbus, Ohio, retailing consulting firm, C. W. Ress & Associates. "I don't know anyone who works there who sees daylight," Ress said, pointing out that, even at night, you can drive by The Limited's headquarters and see the parking lot full of cars.
"Les is totally married to the business. He's never been married. He has never had time," Ress said.
"We all work, we work pretty hard," commented David T. Kollat, The Limited's executive vice president. "But it's difficult to draw a distinction between work and play. If work is successful and doing well, it's a lot of fun." Besides, Kollat added, hard workers are well-rewarded at The Limited, noting that at least 50 of the 17,000 employes there have become millionaires through salaries, stock options and other benefits.
Wexner himself has moved from being a law school dropout to a man worth more than $500 million, with houses in Columbus, Manhattan, Palm Beach and Vail. His New York apartment -- where he spends about two days every other week -- is overflowing with modern art and antiquities. At the same time, he is a philanthropist who has remembered his roots in Columbus.
His life today is far from what he envisioned when he started The Limited in 1963. "Before we had a store, I wanted only to have a store and not go broke. In terms of a lifetime ambition, I thought I would be happy if I could have one store and a $15,000-a-year income. Then after we had one store, it was like, maybe we could have two stores. Then, if we could have two, we could have 10. When we got to be 10 stores, I thought it was possible, as a lifetime ambition, that we could be a 50-store chain."
Today with more than 1,400 stores, he no longer places limits on his lifetime ambition. "We are never satisfied, and I hope we will never get satisfied," Wexner said. "The day I'm satisfied is the day I die."