LTD

L Brands, Inc.

We operate in the highly competitive specialty retail business. We are a specialty retailer of women’s intimate and other apparel, beauty and personal care products and accessories under various trade names. We sell our merchandise through our retail stores in the United States and Canada, which are primarily mall-based, and through our websites and catalogues.

FISCAL YEAR.
Our fiscal year ends on the Saturday nearest to January 31. As used herein, “2009”, “2008”, “2007” and “2005” refer to the 52 week periods ending January 30, 2010, January 31, 2009, February 2, 2008 and January 28, 2006, respectively. “2006” refers to the 53 week period ended February 3, 2007.

DESCRIPTION OF OPERATIONS.
As of January 31, 2009, we conducted our business in two primary segments: Victoria’s Secret and Bath & Body Works.

VICTORIA’S SECRET
The Victoria’s Secret segment sells women’s intimate and other apparel, personal care and beauty products and accessories under the Victoria’s Secret and La Senza brand names. Victoria’s Secret merchandise is sold through retail stores, its website, www.VictoriasSecret.com, and its catalogue. Through its website and catalogue, certain of Victoria’s Secret’s merchandise may be purchased worldwide. La Senza products may also be purchased through its website, www.LaSenza.com.
In January 2007, we completed our acquisition of La Senza Corporation (“La Senza”). La Senza is a Canadian specialty retailer offering lingerie and sleepwear as well as apparel for girls in the 7-14 year age group. In addition, La Senza licensees operate independently owned stores in 45 other countries. The results of La Senza are included in the Victoria’s Secret segment. For additional information, see Note 6 and Note 21 to the Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data.
The Victoria’s Secret segment had net sales of $5.604 billion in 2008 and operated 1,043 stores in the United States and 322 stores in Canada.

BATH & BODY WORKS
The Bath & Body Works segment sells personal care, beauty and home fragrance products under the Bath & Body Works, C.O. Bigelow and White Barn Candle Company brand names in addition to third-party brands. Bath & Body Works merchandise is sold through retail stores, its website, www.bathandbodyworks.com, and its catalogue.
The Bath & Body Works segment had net sales of $2.374 billion for 2008 and operated 1,638 stores in the United States.
OTHER
Other consists of the following:

•Henri Bendel, operator of five specialty stores which feature accessories, fashion and personal care products;

•Bath & Body Works Canada, operator of six specialty stores which feature personal care, beauty and home fragrance products;

•Mast, an apparel merchandise sourcing and production company serving Victoria’s Secret, La Senza and third-party customers;

•Beauty Avenues, a personal care sourcing and production company serving Victoria’s Secret, La Senza and Bath & Body Works; and

•Corporate functions including non-core real estate, equity investments and other governance functions such as treasury and tax.

COMPETITION.
The sale of women’s intimate and other apparel, personal care and beauty products and accessories through retail stores is a highly competitive business with numerous competitors, including individual and chain specialty stores, department stores and discount retailers. Brand image, marketing, design, price, service, assortment and quality are the principal competitive factors in retail store sales. Our direct response businesses compete with numerous national and regional direct response merchandisers. Image presentation, fulfillment and the factors affecting retail store sales discussed above are the principal competitive factors in direct response sales.

ASSOCIATE RELATIONS.
On January 31, 2009, we employed approximately 90,900 associates, 72,100 of whom were part-time. In addition, temporary associates are hired during peak periods, such as the holiday season.