Limited Brands sells most of Express

NEW YORK (CNNMoney.com) -- Limited Brands, Inc. announced Tuesday it has agreed to sell a majority of its retail clothing chain Express and intends to explore strategic options for its other clothing retailer, Limited Stores.

The company said it signed an agreement with affiliates of Golden Gate Capital to sell 67 percent of its Express brand for $548 million.

Shares of Limited Brands (down $0.61 to $23.82, Charts) fell 1 percent in late session trading on the New York Stock Exchange.

"Limited struggled with Express for a long time. They changed the format several time and that still didn't help. I don't know that Express ever really made money for the company," said George Whalin, CEO of Retail Management Consultants.

"Limited's strength is in its beauty, intimate apparel and candle businesses. By shedding Express and Limited stores, it gives the company a more narrow niche to operate in and well as a greater opportunity to expand within that niche."

Jay Margolis has been appointed chief executive officer of Express and the retailer will continue to operate under the same brand name. Limited Brands has not yet determined when it may possibly sell its Limited Stores business.

In addition to Express and Limited, Limited Brands operates Victoria's Secret and Bath & Body Works.

The company also lowered its outlook for first quarter earnings to 12 cents to 14 cents a share, from its original guidance of 25 cents to 28 cents, and from 25 cents last year, due to weak sales and merchandise margins at each of its retailers, particularly Victoria's Secret.

For the full fiscal year ending next January, Limited expects earnings per share of $1.55 to $1.65, versus $1.75 to $1.90. However, the estimate does not include any impact from the Express transaction or potential strategic options for Limited Stores, the company said.

Limited Brands is due to report first quarter earnings next week. Its competitors include The Gap (down $0.16 to $18.13, Charts, Fortune 500), J. Crew (down $0.43 to $38.61, Charts), and Nordstrom (down $0.70 to $53.49, Charts, Fortune 500).