Limited Brands Inc. (who owns Victoria's Secret, among other brands) has announced that it will buy La Senza Corp., the Canadian lingerie retailer, for $628-million. It will buy all of the outstanding shares for $48.25 each (a 47.8% premium over its stock price now of $32.65 (as of closing time November 14th)). CEO Irv Teitelbaum, COO Laurence Lewis, and Vice Chairman Stephan Gross, will, collectively, retain a 48% stake in the company. This is big news.
The Canadian retailer has been known to "knock-off" its rival, Victoria's Secret, in terms of brand extension, advertising, store layout and most ostensibly, product type, fit and style name. Shortly after the release of Victoria's Secret Ipex bra, La Senza launched their Ipec bra (same style, look and fit). Not surprisingly, as a result, La Senza was slapped with a $1-million lawsuit.
So it was quite surprising to find out that Limited Brands is buying one of their biggest income generating brand's competitors. Surprising until I figured it is the absolute smartest move ever. As the saying goes, if you can't beat them you gotta join them, and that's just what Limited Brands did. There is no real way for them to control what La Senza has been doing (and will continue to do), the law suit fell through, so by owning 52% of the company, they will be able to control the final roll-out of each and every strategy.
I am anxious to see if we will still see the same product assortment from La Senza or a completely new concept. The buyout is expected to happen in January 2007. A definite industry move to keep your eye on.
Photos: victoriasecret.com, lasenza.com
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