Bath & Body Works: `The Mc Donald's Of Toiletries'
When Christmas comes, look for Beth M. Pritchard wearing reindeer antlers while she sells shampoo at a Bath & Body Works outlet. Pritchard isn't a sales clerk: She's the chief executive of the nation's leading bath-shop chain, one of the bright spots in The Limited Inc.'s sometimes troubled empire. Every month, she scopes out what's happening in the shops by spending two days in a BBW boutique, where she helps set up displays, stock shelves, and arrange gift baskets. "I'm not really good on the cash register," she jokes.
For the high-energy Pritchard, 50, gauging how her products play is a consuming quest. She personally tests many of BBW's shampoos, body lotions, and perfumes in her home. To her husband's dismay, their marble shower is loaded with plastic bottles. Pritchard's 15-year-old daughter, Ashley, and her friends are also willing guinea pigs. And when customers in 1994 griped that a face mask stung, Pritchard had her executive committee use it themselves. When they, too, came away irritated, it was pulled.
Pritchard's personal touch--combined with relentless drive--has helped produce an effervescent growth spurt for a company that, until a few years ago, was barely a blip in the $26 billion personal-care-products market. When Pritchard took over Bath & Body Works in 1991, it had just 95 stores with sales of $20 million. By 1996, she had expanded the chain to 750 stores as sales hit $753 million. Her goal is to make BBW "the McDonald's of toiletries." She plans to have 950 shops nationwide by yearend, with a long-term goal of 1,700. In five years, she's aiming for sales exceeding $3 billion. Plus, she is expanding BBW overseas and has started a household-accessories offshoot called Bath & Body Works at Home.
That's quite an achievement in a crowded market. BBW has elbowed past such bath-shop competitors as the Body Shop, now a distant second in the number of U.S. stores. It's also been a boon for BBW's parent which, like many other apparel chains, has been in a funk. Although BBW--which is part of Intimate Brands Inc., itself 83%-owned by The Limited--brings in just 9% of The Limited's sales, it provides an outsize share of profits. J.P. Morgan & Co. analyst Maura Hunter Byrne estimates that BBW had a $192 million operating profit for 1996, up 55%. That's almost 30% of The Limited's operating earnings of $636 million. Margins hit 25.5% in 1996, well above the industry average.
Pritchard has designed BBW shops to have a welcome, down-home feel. They are colorful places that evoke rural America, showing large photos of piled fruit and displaying bath products in old barrels. She's also made innovation a priority: Roughly 30% of BBW's products are new each season, far more than rivals churn out. "Because you don't desperately need our products, we must entertain you," says Pritchard. "It's a Disney mentality."
Unlike the other Limited division heads, Pritchard had no retailing background. BBW's edge is that Pritchard, who spent years as a marketer at Johnson Wax, runs the chain like a consumer-products company, with heavy emphasis on packaging and test-marketing. "We're a brand that happens to have stores that distribute our product," she says.
IT'S A RAID. Before signing on to push perfume and bath oil, she sold something less glamorous: Raid bug spray. For the last six of her 18 years at S.C. Johnson & Son Inc., she was vice-president for insect control, where her canny marketing and product-development skills expanded Raid's market share.
That's what brought her to the attention of Limited Chairman Leslie H. Wexner. The merchandising veteran, who launched The Limited in 1963 and nurtured it into a women's casual-apparel giant, invented the Bath & Body Works concept. But he needed Pritchard's marketing prowess to make it grow. In return, he schooled her in the art of retailing. Says Wexner, who heads both The Limited and IBI: "She is an excellent student to coach."
To this day, Wexner is closely involved in BBW strategy. While Pritchard has a lot of autonomy, she regularly bounces ideas off her retail-savvy boss, who also has put her in charge of the bath and fragrance arm of the Victoria's Secret chain, another IBI unit. "Beth could run her own show without any help," says Donald B. Shackelford, an IBI director. "But it wouldn't be as good a show if Les wasn't there for the strategy and direction."
Managing BBW's rapid growth requires an exec with Pritchard's kinetic style. Her family calls her "the electric lady." On shopping expeditions to search for new ideas, she amazes subordinates by buying thousands of dollars' worth of merchandise in a quick sweep. "She can do more in an hour because of her incredible focus than I want to do in a day," says Ethan Revsin, an executive vice-president. Despite her killing travel schedule and punishingly long work days, Pritchard has mixed home and work in novel ways. Wanting to see more of Ashley, Pritchard has taken her daughter on business trips since she was an infant, helped by "a worldwide network of babysitters."
Much of Pritchard's drive comes from what she calls "an incredibly wonderful role model": her mother, Dorothy Schuele. Pritchard's father died when she was very young, so her mother worked two nursing jobs to support Beth and her brother. After getting a degree in international affairs in 1969, Pritchard enlisted in the CIA, not a popular career choice during the Vietnam War, but she wanted to work overseas. She reconsidered after a year, so she got an MBA and embarked on a business career.
BOLD MOVE. For Pritchard, keeping the chain successful during its aggressive expansion will be tricky. "My only concern is: Can she handle this amount of growth?" asks Gregory Jackson at Yacktman Asset management, which owns 2.1 million IBI shares. "So far, she has shown she can." Since BBW is in most of the top retail malls, Pritchard plans to continue adding stores in locations such as university campuses and strip shopping centers. It's a bold move, since specialty retailers aren't often found there. The soaring margins could begin to dim as well. And though overseas markets are promising, U.S. retailers traditionally haven't done well there. She is testing the BBW concept with five stores in Britain, and will roll out more next year.
In the end, the course of BBW's aggressive expansion hinges on how well the public goes for the vast number of fruit-based gels and lotions she zealously tests at home--many with names like Country Apple and Peach Nectar. "Hopefully, our products smell so good you'll want to eat them," she says. From the look of her sample-cluttered shower, Pritchard's BBW will continue to provide The Limited with ample sustenance.