Recently, L Brands, Inc. (LTD) announced that it has closed the offering of $500 million worth of senior unsecured notes (maturing in 2023).
The net proceeds will be utilized for repaying of 5.25% senior unsecured notes maturing in Nov 2014 and for general corporate purposes (which include share buybacks, dividends and repayment of outstanding borrowings under its revolving credit facility).
L Brands is a leading specialty retailer of women’s intimate and other apparel as well as beauty and personal care products. We believe that the company’s innovation in merchandise and exclusive assortments are popular among consumers and these give the company a competitive edge.
Moreover, L Brands’ sustained focus on cost containment, inventory management and speed-to-market initiatives have kept it afloat amid a sluggish consumer environment. The company’s venture into overseas markets will likely drive long-term growth as these stores perform better than the U.S. stores.
L Brands continues to revamp its business by enhancing consumers’ shopping experience, localizing assortments and enhancing its direct business. We believe these measures will facilitate it to generate incremental sales and increase store transactions through a higher conversion rate.
The company is repositioning its La Senza brand by focusing on the younger generation and providing fashionable assortments at a reasonable price. Moreover, to drive growth, it remains focused on adding the entire PINK and lingerie assortments at its Victoria’s Secret stores and seeks to expand in the adjacent categories.
Presently, L Brands carries a Zacks Rank #3 (Hold). Christopher & Banks Corporation (CBK), DSW Inc. (DSW) and Citi Trends, Inc. (CTRN) are other well-performing stocks that can be considered for investment. All of these carry a Zacks Rank #1 (Strong Buy).
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