Tom Katzenmeyer – SVP Investor Media and Community Relations Martyn Redgrave – EVP, CAO Stuart Burgdoerfer – EVP, CFO Sharen Turney – CEO Victoria’s Secret Diane Neal – CEO Bath and Body Works

Jennifer Black – Jennifer Black & Associates Jeff Black – Lehman Brothers Lauren Levitan – Cowen & Co. Randy Konik – Bear Stearns Brian Tunick – J.P. Morgan Kimberly Greenberger – Citi Dana Cohen – Bank of America Lorraine Maikis – Merrill Lynch Todd Slater – Lazard Capital Markets Paul Lejuez – Credit Suisse John Morris – Wachovia Securities Dana Telsey – Telsey Advisory Group Richard Jaffe – Stifel Nicolaus

(Operator Instructions) Now I would like to introduce Mr. Tom Katzenmeyer, Senior Vice President Investor Media and Community Relations.

Thank you, good morning everyone, welcome to Limited Brands’ fourth quarter earnings conference call for the period ending Saturday, February 2, 2008. As a matter of formality I need to remind you that any forward looking statements that we may make today are subject to the Safe Harbor statement found in our SEC filings. Our fourth quarter earnings release and related financial information are available on our website, limitedbrands.com and as always the call is being taped and can be replayed by dialing 1-800-337-6551 followed by the pass code 583 and you can also listen to an audio replay from our website. This is who is with me today, Martyn Redgrave, EVP and CAO, Stuart Burgdoerfer, EVP and CFO, Sharen Turney, CEO Victoria’s Secret, Diane Neal, CEO Bath and Body Works and of course Amie Preston, VP of Investor Relations. After our prepared comments we will be available to take questions for as long as time permits. I’ll remind you again then, I would like to get to as many questions as possible, so please limit yourself to one and with that I’ll turn the call over to Martyn Redgrave.

Thanks Tom and good morning everyone. I’d like to begin by providing a brief recap of 2007 and an update on several of our strategies and initiatives including our Victoria’s Secret direct distribution center, our technology projects, our real estate expansion initiatives and our international development. Stuart will then take you through our fourth quarter results and our outlook for 2008 and then Sharen and Diane will discuss Victoria’s Secret and Bath and Body Works in more detail. Now as we look back at 2007 we are clearly disappointed with our financial performance. We did however accomplish much in terms of the execution of our business strategy, including the full stabilization of our new supply chain systems at BBW, the acquisition of La Senza, the sale of the majority interest in Express and Limited stores, the realignment and resizing of our organizational structure and the resulting reduction in our workforce, the recapitalization of our business resulting in the issuance of an additional $1.25 billion in debt at very attractive rates and the repurchase of $1.4 billion in shares in 2007 and finally the opening of a new distribution center for Victoria’s Secret direct and I’ll talk more about that in a minute. All of these actions were planned and they’re very much a part of the new strategic direction for Limited Brands. They are what we needed to do to set the platform for growth in our core brands. In addition to all of the changes I’ve just mentioned, we also face a number of challenges in 2007. First of all, disappointing product launches and a downturn in the environment put significant pressure on merchandise margins in the first half of the year as we worked to clear through excess inventory. Our year end inventories, retail inventory are down 25% per square foot. Second, it did take us longer than expected to get the new direct distribution center up to capacity. This resulted in a significant incremental cost in the last half of the year and forced us to proactively take steps to reduce demand in the fourth quarter. In summary, the business went through transformational changes in 2007. We believe that these changes have prepared us to enter 2008 in a better position to focus on the growth and performance of our core brands. With respect to 2008, we believe that the retail environment will continue to be very challenging and are therefore managing inventory, expenses and capital expenditures very conservatively. Foremost in our work, we are focusing on the things that face the customer, our merchandise assortments, our speed and agility, our marketing and our store experiences. Now I’d like to give you a brief update on the things I mentioned earlier. First, with respect to the direct distribution center, we continue to make progress and we are focusing on two key things. Our primary focus is on the things that face the customer, including being able to fully meet the volume demands that are targeted accuracy levels and offering all expedited shipping options. We are targeting to have all these issues resolved by the June semiannual sale this year. At the same time, we are focusing on improving our overall efficiency and productivity within the DC. In relation to this effort, we do think it will take a longer period of time before we are completely where we need to be. As a result, in 2008 we will continue to be negatively impacted by higher costs associated with lower accuracy levels, running the DC and implementing the solutions. Second, with respect to our technology initiatives, we’ve made the decision to postpone the implementation of the new supply chain systems at Victoria’s Secret stores and we are now planning to implement these systems at Mast in 2008 and Victoria’s Secret in 2009. In addition, in the fourth quarter we and our investment partner in the front end technology venture for Victoria’s Secret direct elected not to provide additional funding and that venture has closed. We are currently evaluating alternative approaches to support the VSD business. Third, with respect to our real estate strategy, we remain committed to our initiatives to increase the footprint of our Victoria’s Secret stores and open new Bath and Body Works stores. We continue to closely monitor the stores which were completed in 2007 and while we are continuing to see significant sales lifts, the results have moderated more or less in line with the decline in the sales trends of our base business. In light of the current environment, we have taken a close look at the projects that were planned for 2008 and have reduced our plans versus where we were last fall. Specifically, we have reduced the number of projects planned for 2008 by 25%, resulting in a reduction in planned capital expenditures of about $85 million. Our square footage growth in both brands will be about 2% lower than previously planned or roughly 8% for VS and 5% for BBW in 2008. We will continue to closely evaluate how to deliver maximum sales and incremental profitability from our real estate investments. I’d like to conclude with an update on our plans for international expansion. As you know, following our acquisition of La Senza in 2007, we began to focus in earnest on evaluating this opportunity. We have taken a quote, go slow to go fast approach. As we want to ensure that we position ourselves for maximum growth and profitability over time. We spent last fall researching the opportunity meeting across the globe with potential partners and developing our strategy. We have made the decision to open five to ten BBW stores in Canada in 2008 and of course we’ll continue to support the growth of La Senza. In addition, we decided to make a change in the leadership team that will drive our international expansion. I’m very pleased that we’re bringing Martin Waters on board. Martin joins us from his position as managing director and North American chief executive officer for Boots Retail International, the United Kingdom’s leading health and beauty retailer. At Boots, Martin was responsible for international retail operations and brand sales to leading global retailers, both in North America, Western Europe, Eastern Europe and Asia. His experience includes merchandising, planning and allocation, brand management, marketing and supply chain operations. He also has extensive experience in establishing new business models in numerous countries. I think that Martin will be a valuable asset to us as we pursue our international growth opportunities. We are currently conducting a full evaluation of our potential partner candidates and are developing our plans for what I call the how, the where, the when and the with whom and we expect by Fall that we will be putting actual deals in place and laying the groundwork for stores to be opening in the Spring of 2009. Thanks and now I’ll turn it over to Stuart for the financial update.

Thanks Martyn and good morning everyone. Turning to our fourth quarter performance, we reported earnings of $1.10 per share versus $1.08 per share last year. This year’s result includes two significant items. First, the recognition of $47.8 million of sales and operating income or $0.08 per share related to initial gift card breakage at Victoria’s Secret. The gift card breakage amount recognized was based upon analysis of historical redemption patterns and represents the gift card balances which we believe are unlikely to be redeemed. As you recall, we began recognizing gift card breakage for Bath and Body Works in the fourth quarter of 2005 but this is the first period in which we’ve recognized gift card breakage for Victoria’s Secret. Therefore, the amount reported includes the breakage income related to gift cards sold since inception of the gift card program. Second, we recognized favorability in our income tax provision versus our typical effective tax rate of 39%. This favorability benefited earnings per share by about $0.08 and was driven by a decline in the Canadian Federal tax rate, the finalization of income taxes related to the Express and Limited Stores divestitures, audit settlements and other items. Excluding the gift card and income tax benefits, our fourth quarter earnings per share were $0.94. Fourth quarter net sales were $3.276 billion, including the gift card breakage of $47.8 million, versus $4.025 billion last year and comps were down 8%. Gross margin decreased 30 basis points to 39.8%. Excluding the impact of gift card breakage, the gross margin rate declined 120 basis points. The net of the positive effect of the elimination of the lower margin apparel business, offset by the negative effect of the recognition of Mast sales to Express and Limited Stores, was a positive impact of about 60 basis points. The remaining decline of roughly 180 basis points is the result of declines in the gross margin rates at Victoria’s Secret and Bath and Body Works. Sheren and Diane will discuss these declines in more detail. The SG&A rate improved by 120 basis points. Excluding the impact of gift card breakage the SG&A rate improved by 90 basis points. The net impact of the apparel divestitures including the recognition of Mast sales to Express and Limited Stores drove 120 basis points of improvement. In addition, the rate was favorably impacted by lower home office head count, incentive compensation and marketing expense, offset by increased technology costs. Total operating income, excluding the $47.8 million in gift card breakage and the apparel business last year declined $110.4 million to $573.6 million. By segment, the Victoria’s Secret segment declined by $84.5 million to $321.9 million. Bath and Body Works declined by $35.2 million to $301.4 million. And the other segment improved by $9.3 million to a loss of $49.7 million. This improvement was the result of a decline in corporate overhead cost that was partially offset by a decline in Mast profitability. Below the operating income line, the $9 million increase in other income was driven by the recognition of 25% of Express’ net income. Retail inventories ended the quarter down 25 per square foot at cost in line with our targets. We repurchased 10.9 million shares of stock in the fourth quarter for $196.7 million. At the end of the fourth quarter, we had $149.8 million remaining in our current $500 million program. Now, turning to our earnings outlook for the first quarter, we are a couple days away from the end of the month and we anticipate that February comps will be in the negative low double digit range versus our previous expectations of down mid to high singles. As Martyn said, we expect that the retail environment will remain challenging, therefore we expect first quarter earnings per share between $0.05 and $0.10 versus last year’s $0.13 result. Versus last year, we expect that our operating income dollars will be most impacted by a decline at Bath and Body Works, the loss of last year’s apparel income, a reduction at Victoria’s Secret direct due the incremental cost at the DC and a decline in operating income at Mast driven by lower sales. Those things will be partially offset by a reduction in corporate overhead related to our headcount reductions. We estimate that first quarter comps will be down in the mid to high single digit range. We estimate that the first quarter gross margin rate will decline. The decline is driven by the impact of the apparel divestiture, including the recognition of Mast sales to Express and Limited Stores and deleverage of buying and occupancy cost on the negative comps. We do expect merchandise margin rates to improve at both Victoria’s Secret stores and Bath and Body Works. We estimate that the SG&A rate will improve in the first quarter driven by the impact of the apparel divestiture, including the recognition of Mast sales to Express and Limited Stores. Inventory levels in the Spring will continue to be down to last year, although the rate of decline will moderate as we begin to lap last year’s decreases. We expect to end the Spring season with retail inventory per square foot down in the low double digits. For the full year 2008, we are projecting earnings per share of $1.35 to $1.55. The full year projection is based on roughly flat comps, an improved gross margin rate driven by improved merchandise margins at both segments and a roughly flat SG&A rate. The impact of the apparel divestiture does not have a significant impact to the full year gross margin rate and has a slightly unfavorable impact on the SG&A rate. 2007 capital expenditures were $749 million versus our projection of $765-$790 million driven by a reduction in technology spending. For 2008, we are projecting capital expenditures between $575-$600 million. The decline versus last year is primarily driven by a reduction in real estate spending for Victoria’s Secret, a decrease in distribution center investment, a reduction in technology and home office spending and $34 million related to apparel capital spending in 2007. Over 75% of our capital expenditures relate to investments in remodeling and expanding existing stores as well as opening new stores. This investment relates to the real estate growth for Victoria’s Secret and Bath and Body Works. About 15% of our cap ex budget relates to investments in technology initiatives. The remainder of our cap ex budget relates to home office and other investments. Before I turn it over to Sharen, I’d like to make some comments on La Senza’s fourth quarter performance and discuss a change in how we allocate the cost of our corporate functions that we’re making in 2008. Our fourth quarter results at La Senza were below our expectations. Fourth quarter sales were $165.9 million and comps were down 3%. Sales were down across all lingerie categories. The sale of Victoria’s Secret beauty products which started during the month of October contributed an incremental $10 million in sales to the fourth quarter. Finally, consistent with our strategy of focusing on our core brands and rationalizing our corporate structure, in 2008 we will be changing our methodology for allocating certain corporate costs to the brands. Specifically, costs related to functions such as store leasing and construction will no longer be reported as part of corporate overhead in the other segment but will be allocated to Victoria’s Secret and Bath and Body Works. We believe this methodology will more appropriately reflect the operating characteristics of our business following the restructuring and reorganization that we implemented in 2007. This morning we distributed a revised financial package which includes restated segment results by quarter for 2007 and 2006 and annually for 2005. On average, this change will reduce Victoria’s Secret and BBW segment operating income rates by roughly 100 basis points. The change primarily impacts SG&A expense in the reported results of each segment and it does not affect our consolidated results. Thanks and now I’ll turn the discussion over to Sharen.

Thank you Stuart. As I discuss the Victoria’s Secret business, please remember that the results exclude the $47.8 million in gift card breakage that Stuart described earlier. Total Victoria’s Secret segment sales including La Senza decreased $19.4 million in the fourth quarter to $1.8 billion. Comp store sales decreased 8% against a 10% increase comp last year. During the quarter, total segment operating income declined $84.5 million to $322 million. Both the direct channel and stores channel contributed to the overall decline. La Senza had a small operating income increase. Now turning to the individual business performance for the fourth quarter, Victoria’s Secret stores delivered sales of $1.2 billion, a comparable store sales decline of 8%, comp store sales for the quarter were below our expectation, our performance continued to be hampered by the overall economic environment and our assortment did not overcome this hurdle. We did have modest growth in our pink and sleepwear business, however this was offset by a decline in our bra, panty and beauty business. Operating income dollars declined and the operating income rate declined significantly driven primarily by the buying and occupancy deleverage. The merchandise margin rate was down to last year. During the quarter, we proactively managed expense and strategically reduced our investment in marketing, as a result we did lever our SG&A expense. As we entered 2008, we are focused on several key initiatives. First, we will return to our brand heritage. We will reaffirm our authority in lingerie and fashion leadership by increasing the level of sophistication in our product offering. We will also reinvent the sleepwear business and focus on product quality. Our assortment will return to an ultra feminine lingerie brand to meet her needs and expectations. Next, we will continue to be focused on growing our business. We have reorganized our structure to refocus on a stronger pipeline of product consisting of quality, sophistication and fashion. We have reinvented the organization by supplementing the strength of our tenured leadership by increasing talent in product design and in store experience. We’ve also added new leadership in beauty focused on optimizing the beauty business. These investments will help deliver the right product, reinstall our fashion authority and provide the customer with what she wants while enabling us to improve our merchandise margins. We are evolving our real estate and space optimization through productivity improvement and evaluation of our real estate investment strategy. In the fall we opened 23 new stores and remodeled 73 stores while delivering significant sales lift, these locations did not deliver on expectations. As Martyn mentioned, going forward we are reevaluating the speed of execution, mindful of the economic pressures. In the Spring, we plan to open 31 new stores and remodel another 45 stores. We’ve also reorganized to create a solely dedicated team to real estate optimization, something that we’ve never had before. And we are balancing our sales growth with our inventory investment. Our year end inventory levels were roughly 30% below last year on a per square foot basis. This will allow for greater agility to chase and test new ideas as well as being more responsive to dynamic customer demand. As we think about the first quarter, we are excited about our latest bra innovation that will be launched next week. The new bio fit bra is the first bra to offer different padding for different cup size, providing a naturally enhanced silhouette. Following this launch, we will focus on fewer but more powerful bra launches in the remainder of the season. We will also continue to test and incubate new concepts such as swimwear, a great example of leveraging our multi channel operation. Turning our attention now to the direct channel, sales at direct were $431 million in the fourth quarter, down 12% to last year. On a comparable 13 week calendar basis, sales were down 7. Sales were negatively impacted by the steps that we took to reduce demand due to the capacity issues at the DC. However, shipments to the DC improved throughout the quarter and were better than we had initially anticipated and we were therefore able to take action to regenerate demand including email contact and promotional offers. Consequently, sales were significantly higher than initial expectations. Fourth quarter operating income dollars and rate were both down significantly to last year. The decline in operating income was a result of the sales and related shipping and handling revenue decline, the loss of higher margin expedited shipping options, mark downs on seasonal merchandise and incremental labor prior to staff at DC and work on fixing the issue. As Martyn said, we have made significant progress with the DC and we are working very hard to bring it up to full capacity and maintain customer satisfaction. In the first quarter we are focused on strategies to reactive our customer file, the combination of the $2.00 bounce back offer, emails with a limited time offer and shop price points on excess cold weather inventory is enabling us to reduce fall inventory while simultaneously reengaging our customers. We are very pleased with the early results of these activities and the positive feedback we are getting from our customers. Thank you very much now I will turn it over to Diane.

Thank you Sharen and good morning everyone. Bath and Body Works comps decreased 8% in the fourth quarter against a 9% increase last year. Continued softer than expected traffic plus a disappointing holiday and semiannual sale performance. Sales for the quarter decreased $94 million over last year. Contributing to the softer than expected traffic and disappointing holiday and semiannual sale performance, where the gifting assortment did not meet our expectations which required additional mark downs earlier to clear seasonal merchandise. Lack of newness in the assortment contributed to dampened excitement throughout the holiday. Prolonged holiday discounting lowered the value proposition and overall performance of our semiannual sale in January. The gross margin rate was down to last year driven by a slight decrease in both merchandise margin rates and deleverage in fixed buying and occupancy expenses due to startup costs associated with new store real estate activities. The decrease in merchandise margin rate to last year was driven primarily by promotional activity in December as we became more aggressive at clearing seasonal merchandise leading up to the holiday. Throughout the quarter we continued proactive measures to manage discretionary expenses which contributed to modest SG&A expense leverage over last year. For the quarter, operating income versus last year declined $35 million to a profit of $301 million. Profit rate was down 80 basis points driven by the gross margin rate reduction detailer earlier. The active management of inventory throughout the season allowed us to finish the year with inventory levels that were significantly below last year. During the quarter, the performance of our ecommerce business met expectations. We continue to view the direct channel as both a revenue generator and marketing vehicle for our brand and collection of sub brands. Following our semiannual sale, we shifted to our expert advice theme featuring products and tips from Dr. Patricia Wexler, Frederic Fekkai, Dr. Michael Breus and our own Harry Slatken. This theme continues through February with additional focus on gifting during the Valentine’s shopping period. The balance of first quarter will feature a new spring collection and fragrance launches with an increased gifting focus during Easter and leading up to Mother’s day. Bath and Body Works is focused on a few key priorities in 2008 to reinvigorate the brand, create more brand consistency and change the current negative sales trend and traffic declines. As I mentioned last October, we are focused on building and growing our key brands, C.O. Bigelow, True Blue Spa, Aromatherapy, Signature Fragrant Body Care and our Home Fragrance business. We are expanding product categories, improving quality and pushing the sophistication level in our fragrances, products, category and the look and feel of our stores. You will see dramatic change in the Fall, including our key fragrance launch in September, focusing on greater sophistication, pushing our customers forward and getting more acceptance with younger customers. Along with improving and growing our key brands, our next big focus is unlocking the potential by store and market and customer segment. Our assortment optimization test or SKU reduction has given us great insight into our assortment architecture by market and we realized a greater need to further segment our business to maximize market, store, brand and business segment productivity. This applies to our own labels as well as our third party branded business and we will spend the next several months testing, analyzing and developing a plan to segment our fleet by business opportunity. We are also taking a deep [dive] into the physical condition of our fleet and segmenting [that] work and the capital investment to align with our product [sub-mutation] work. As you can imagine, this is a large task and will require much work this Spring, but we are extremely confident that this will change our business and help us expand product categories and brands more appropriately. Lastly but certainly not least is our continued work on utilizing our system capabilities. We have seen a dramatic change in our balance of inventory by store and this will be a key driver in our segmentation work. We have some exciting launches this Spring, starting this week with Orchid which is off to a good start, but we do believe the Spring season will continue to be soft and we’ll gain some momentum as we move into the second quarter. The true impact of our product and store visual presentation work will not be felt until Fall. Our segmentation work is also something that will take longer to implement but we do feel we can impact distortions by brand and store based on the analysis that we are doing and we should be able to impact our business in the Fall and holiday timeframe. With that, I’ll turn the discussion back over to Tom.

Thanks Diane and Sharen and Martyn and Stuart, that concludes our prepared comments and operator at this time we are ready to take questions.

Thank you at this time we’re ready to begin the question and answer session. If you would like to ask a question please press star one at this time. To withdraw your request, you may press star two. Again to ask a question, please press star one at this time. Our first question is from Jennifer Black of Jennifer Black & Associates. Jennifer Black – Jennifer Black & Associates: Good morning, I wondered if you could talk a little bit about cost inflation, how you’re dealing with it? Are you raising prices and just sourcing in general, thank you.

Thanks Jennifer, we’re going to go to Martyn Redgrave with that question.

One of the interesting phenomenas for us given our kind of global supply chain capabilities and the way we relate to our manufacturing partners is that we’re really not seeing a lot of cost pressures across our supply chain. Obviously fuel prices and other things in the transportation logistics side of the business are significant variables, we are seeing pressures there obviously. But in terms of average unit cost coming out of manufacturing facilities and because of the relationships that we have, we’re not experiencing a lot of cost pressures that we’re having to react to or would think about reacting to from a price point of view.

Great, thanks, let’s take our next question.

Jeff Black of Lehman Brothers, you may ask your question. Jeff Black – Lehman Brothers: Thanks a lot, hello folks, I guess a question for Sharen. Talk about your, you know the bra business in general you know we’ve got a lot of new entrants or seemingly new entrants, what are your thoughts about being competitive across more price points or more competitive across a range of price points, what might that mean to the product offering and the inclusion of some SKUs in the business with potentially lower prices and also ultimately what that means for AUR, thanks.

Sure, first of all within the bra business as we’re looking at it from a strategic point of view, we do believe there’s an opportunity in our tiering the price. One of the reasons we were very interested in our partnership with Intimissimi, it is a fabulous opening price point from the fashion perspective, so in terms of looking at $19.00 everyday bras and as now that we’re rolling that out to approximately 250 stores and we’re learning a lot and being able to see the unit velocity, we do believe that there’s an opportunity to continue to tier it, not only from a lower price point but also on the higher end in terms of true higher end fashion quality bras. So I think that one of our strategic initiatives as we move forward is to have the good, better, best pricing strategy even more than what you see it today.

Thanks next question please.

Lauren Levitan of Cowen & Co., you may ask your question. Lauren Levitan – Cowen & Co.: Thank you good morning, I’m wondering if you could update us on any additional cost control or expense control initiatives that might be underway. We know you put a big plan in place last year but it appears the environment is even tougher than when you established that plan so I’m just wondering if you could give us any thoughts on additional opportunity, what those areas of opportunity might be and the timeframe under which you might be able to realize any additional cost controls.

As you mentioned we did take $100 million out annually you know through the actions that we took last summer. But we are looking at other opportunities and we think the biggest area of opportunity in our business and I commented on this in October at the analyst meeting relates to technology. So we’re looking at that spend and what the alternatives are. And we’re also looking at other material parts of our cost structure, so we’re looking at all material aspects of our cost structure, but the biggest opportunity is in technology and we’re not in a position to talk details at this point. But it is actively being worked.

Randy Konik of Bear Stearns, you may ask your question. Randy Konik – Bear Stearns: Thanks a lot, you know just given the wide range with your 2008 earnings guidance of $0.20, can you just walk us through the variability between the low end of the plan versus the high end of the guidance in terms of comp and margin assumptions and then could you just give us a little more clarity, given you’re planning for a flat comp for the year, what does that imply for the inventory outlook beyond 1Q and for year end inventory? Thank you.

So in terms of the kind of the variables that drive the range for the year, the most significant variable as you can appreciate is our sales assumptions. So that’s the biggest variable. And then the next biggest variable is how much improvement we get in the merchandise margin rate. And obviously the variability in sales you know flow through to the bottom line and effects rate relationships as well in terms of buying and occupancy leverage, expense leverage, et cetera. So those are the biggest variables, are sales, gross margin expectation. As you know, we had a significant decline in merch margin in 2007 so we expect improvement but the question is how much given the environment, competitive action et cetera. You know the other thing that’s material in the projection is the effect of our share repurchase activity and our borrowing in the form of additional interest expense. We do expect accretion from the net of those activities in 2008. Randy Konik – Bear Stearns: Can you give us the numbers on the comp and margins, what was the low end, what was the 135 assume as a comp? And then just on the inventory to follow up, you know given the flat comps for the year planned, what does that imply for an inventory outlook, you gave the inventory outlook for 1Q but what does that imply for the rest of the year?

Yeah on the specific comp range we want to be thoughtful about how specific we are but I would think about a range of 2-300 basis points on comp. In terms of inventory, once we pass through the Spring season what we’ll be working to and are doing is keeping inventory and growth with sales with inventory growth per foot in line with comp store sales trends.

Brian Tunick of J.P. Morgan, you may ask your question. Brian Tunick – J.P. Morgan: Hi, yes, thanks for Sharen I guess and Diane, I was just maybe hoping you could remind us in 2007 you know what categories had the biggest gross margin decline, where should we be looking for the biggest improvement there and I guess Stuart sort of hinted at that, but at what pace do we start to think about a realistic merchandise margin recovery over the next year or two, you know do you think the two businesses were over-earning over the last couple of years?

I think to answer your question on margin rate declines, really for us our holiday business is such a huge part of our year and our gift sets really drove the majority of that decline as well as we [they] are over promotional on our signature key collection which also drove some of those declines. As far as when we start to see that improve, we’re starting to see that improvement now but we’ll see much more as we head throughout the year because we are being a little less promotional and much more prudent on how we’re managing our business and driving traffic.

The number one category that drove the decrease in our margin rate was bras last year, number one in terms of just the IMU that we were seeing and then the promotional nature of how we ran the business in the Spring season. For the turnaround for the comp I think you’ll see in late Spring from a margin perspective as well as in the fall. The other category is beauty where we saw a decrease in margins again due to the promotional nature of the business and they also believe the lack of newness that we have not had in the beauty business in quite some time. So I think that the beauty business is going to be a little longer for us to see improvements there and probably early 2009.

Kimberly Greenberger of Citi, you may ask your question. Kimberly Greenberger – Citi: Great, thank you, my question is for Sharen, can you talk about the way that you’re thinking about product launches here in 2008, the number of launches compared to 2007 and I think you indicated in your prepared remarks that you’re trying to give the customer what she’s looking for, have you done focus groups or how were you trying to sort of better address your customer needs and your product innovation? Thanks.

Great, the number of launches that we have launched for 2008 compared to 2007 we have one less bra launch. What we’re looking at especially in the Spring season is we have two very, very powerful bra launches and then within between those bra launches we are doing some actual trans-fashion presentations. An example of that is super model obsessions of which we’ve taken the brand new items such as the high waisted panty and really pulling together an ultra feminine presentation from all of our sub brands, so we have a very powerful launch bio fit which launches next week then we go on to the supermodel obsession then we come back with another powerful launch and then we go into Mother’s day. We’re also looking at how do we coordinate from a total box perspective around our lingerie launches with our beauty launches and telling the total Victoria’s Secret story. Our CRM this year is doing that as well. Your other question was around customer, we’re doing a lot of customer focus groups these days. Number one is that we have moved off of our brand heritage. When you go back in time and look at really how Victoria’s Secret was started and if you, a brand is a story well told and you think about that the Victoria who we used was really manor born, she was from London, very ultra feminine and we’ve so much gotten off of that, of our heritage to things that are much more provocative, too sexy, we use the word sexy a lot and really have forgotten the ultra feminine. And our stores reflect that as well, so we are really, I feel so strongly about us getting back to our heritage and really thinking in terms of ultra feminine and not just the word sexy and becoming much more relevant to our customer. We have an aspirational customer of 26 years old, we have pulled in focus groups around the 26 year old. When you think about forever young and how we used that, we got younger with pink and pink was successful but then all of the sub brands tried to be young and what forever young really is supposed to be is relevancy. So we have focus groups from different age groups, we still have a lot of focus groups around our pink and [collegic] and now with the aspriational 26 year old, where we’re taking them to the competition, walking the malls with them, having them look at products and so I think the feedback has been very robust for us.

Dana Cohen of Banc of America, you may ask your question. Dana Cohen – Bank of America: Okay hi guys, a couple things, first is I know this is not a sales call but on the other hand given how much February has been below plan, can you just give us some sense of what has happened here and then just two [nits], I thought Mast, why is Mast profitability declining in Q4 and into the Spring, I thought given what I understood of the deal with Express, profitability should be going up. And then on the other line, is the total delta year over year Express because that would almost imply that they had sought profitability.

First of all, our traffic in February has been largely as expected and we do feel that some of our issues this month are through our signature collection which represents more than 40% of our business. Our keystone brands that we’ve been focusing on for February have been doing very well but they’re small in total and we haven’t really built the depth of those brands to recognize that and I think because of our over promotional activities throughout 2007 as well as our semiannual sale in January [is how] we helped some of the or hurt some of the trajectory of our signature collection. But our Orchid launched this week and it’s doing better, it’s doing extremely well, but it also tested much better than the fragrance we had in last Spring. All that saying though, we are still concerned about the traffic.

For February, last year we actually loaded up February and we had our big secret embrace launch across all the sub brands. We put about 15 million in circulation and CRM you know come in, get a bra, buy it and get the second one at $15 off, very promotional, we drove a lot of traffic and we are not anniversarying that promotional activity. Our bra launch this year does not fall really into the February timeframe but really falls more into the March timeframe so that is also a reflection of what’s happening in February. So we are seeing a decline in the store traffic, primarily due to the mall traffic as well as our own, fewer CRM pieces in the store and the movement of the bra launch from February to March.

So on Mast in the fourth quarter that year on year decline would be driven by the loss of the Abercrombie business, less volume internally with respect to Victoria’s Secret and also a reduced profit rate on the third party business to Express and Limited. The other result is driven by inclusion of the Express in terms of the growth, is driven by the inclusion of the Express minority interest. There are a few other things in there that offsets that a bit but the key driver of change here on year is inclusion of the Express and Limited results. Dana Cohen – Bank of America: Okay, great, thank you.

Lorraine Maikis of Merrill Lynch, you may ask your question. Lorraine Maikis – Merrill Lynch: Thank you, good morning. Just a quick question on square footage growth, I guess we’re just trying to understand, if the expanded stores are performing below plan at this point, why wasn’t that program put on hold instead of just cut and I guess why so many Bath and Body Works openings into this environment?

As I said, you know we have substantially reduced the pace of the program. What we’re focused on is continuing in the VS side to touch all of the stores that are coming off of lease expiration, so over 75% of the projects that we’re continuing with are at lease expiration and we need to do something with them so we’re choosing to proceed with those projects. In terms of the performance, as I also said that we’re cutting capital associated with the real estate initiative. In terms of performance, while the sales lift that we are targeting is not being realized fully, there is a substantial sales life in incremental profits flow through from these new projects in 2007 after you count for the accelerated depreciation that we had to recognize on the projects in 07. We’re also seeing that, the other thing I will clarify is in terms of the projects we’re going forward with is we’re very much focused on the top malls, the top performing malls and where we have opportunities to get the space that we need in the right location of the mall, we don’t want to forego those opportunities. Final thing I’d say is the BBW new store openings actually are performing very well and from that point of view are meeting our expectations.

Todd Slater, Lazard Capital Markets, you may ask your question. Todd Slater – Lazard Capital Markets: Thanks very much, my question for Sharen is if she could provide a little more color on the performance of basics versus fashion bras. I’m curious as to why the basic replenished their businesses in the stables one might expect and for Martyn on the international, does the management change at all signal a change in approach in terms of how you’re looking at the global opportunity and might you move away from the capital light margin right franchising slash licensing model. Thanks.

In terms of our basics, with in terms of the bra business that pretty much, that’s what when we were doing a lot of the promotional activity last year. Almost all season long in promoting the basics and that is something that we’ve chosen not to do. We also have an opportunity in terms of making sure that we’re in stock in our basics within the stores, we’ve been having some problems with between the, what the inventory says is in the store versus the reality of it and we’ve actually hired an outside firm who is coming in to look at that and we’re instituting some programs starting March 1st to be better in stock with our basic program. The other thing is too, the trend right now in terms of looking at the bra business is all about moving to fashion and lace. So you’re also seeing a shift in that and I think with the bio fit launch which is really a great new basic program and then our next launch which is going to be under the guise of dream angels has a whole new laced face to it, so I think that having the balance between both. So I do see that there’s some opportunities in terms of our in stock and then also the lack of promotional activity this year.

Todd, what I would say is that given what we’ve said publicly before, nothing has changed in terms of the strategy or the approach that we intend to take. We continue to think that a capital light model emphasizing franchising and on a limited basis joint ventures, the possibility of flagship stores in a couple of key locations that we might actually have a heavier hand in operating is the right strategy for us to pursue. Martin Waters really brings to the table what I call been there, done that experience. So one of the [turns] that we have had is that well we have wonderful experts on the US business here in the company, we really don’t have anybody in the company who has on the dirt around the world experience in actually operating, building a business and operating a business outside the United States, other than our team at La Senza, which we are also continuing to tap into very heavily as we learn from them about their experience in franchising around the world. So Martin really adds that capability to join with us and help us pursue that strategy. I think it’s an accelerator in terms of pursuing the strategy that we’ve articulated before.

Thanks Todd, it’s going on 10:00 o’clock but I think we’d like to take a couple more quick questions if we can operator.

Paul Lejuez of Credit Suisse, you may ask your question. Paul Lejuez – Credit Suisse: Hey guys, Paul Lejuez. Two quick ones, just Sharen with less focus on sexy it sounds like at Victoria’s Secret, are you reconsidering maybe doing the fashion show and then second if you could just share with us your thoughts on the Easter shift timing? Thank you.

Okay, the fashion show is, are we reconsidering not doing it? At this time we’re still looking forward to a fashion show. I think that there’s such a great opportunity before the holiday timeframe from a brand awareness perspective and each year we try to like we want to continue to reinvent the fashion show. I hope all of you got to see the commercial on the Super Bowl which was a little less seductive and that’s kind of the direction we’re moving in. The Easter shift, within the Easter shift there is going to be since we will be closed one day in March, we will lose the selling day as it shifts from April into March. History will tell you that when Easter is earlier it does help the summer business. So I think that there’s some positives to that as well.

John Morris of Wachovia, you may ask your question. John Morris – Wachovia Securities: Thanks, good morning everyone. I’m trying to understand, so maybe you can enunciate it a little bit better what the factors will be to drive the recovery in the back half that’s assumed in your guidance. You know if I look at it, you’re wisely being conservative on the outlook for the consumer. The first quarter you know coming in down mid to high single digits, the DC overhang I think potentially impacting the second quarter as implied by your commentary was related to the turnaround in, by June and inventories planned down significantly, it sounds like comps in the back half would be assumed to be up significantly. So maybe if you all could kind of enunciate the factors that would drive the back half recover? Thanks.

Why don’t I provide some overview and then if Diane or Sharen want to add we can do that as well. The biggest, John, the biggest driver of operating income increase in the back half of the year will relate to the direct business. So as you know we had a set of challenges that materially impacted the fall result in 2007. So the single biggest driver of operating income growth in the fall is will be the result in 08 versus the result in 07. As Martyn alluded to the fact that there are some ongoing costs which there are, but in terms of a year on year change, VSD is the biggest piece. And then we’re expecting some improvement in comp for the big businesses but we’re not, highly aggressive. And obviously the business is taking actions that Diane and Sharen had both described in terms of assortment and other things to change the trend of the business. John Morris – Wachovia Securities: I think so much of it would depend upon BBW in the fourth quarter since it’s so important, so any kind of read on the confidence about how you’re planning or testing for holiday there?

Sure, I think part of our problem in 2007 is we relied too much on the past for our success as well as we way over invested in our gift set strategy. So for 2008 we have much more newness, we’re looking at all of our key volume drivers and completely reinvented every single one of those programs as well as a much decreased emphasis on our gift set strategy and spending more time really on our core brand. Along with that we have much more sophistication in all of our product launches as well as our in store experience.

John one other thing I would add and this is just mechanically how it works is that the accretion from the share repurchase activity skews heavy to the back half of the year just given where the earnings are. John Morris – Wachovia Securities: Thanks.

Okay, let’s do, I think we still have a lot of people in the queue, we’re going to try to do two more if we can.

Dana Telsey of Telsey Advisory Group, you may ask your question. Dana Telsey – Telsey Advisory Group: Good morning everyone. Could you please talk a little bit about given the weak holiday season the promotions at BBW, what were the levers that drove the BBW operating margin and are they sustainable? And then at VS, what are the marketing plans for 2008 and any updates on pink and VSX. Thank you.

Well we do think we have an upside on operating margin just because of the changes that we’re making to our product assortment, better investment and more prudent investment in inventories and the product categories are really going to drive business for us. As well as I said earlier, we have so much more newness and reinvention in some of our key drivers. We actually expect our operating income to increase in the fourth quarter of 2008.

Our marketing, we will actually be spending less dollars in true marketing. In the marketing numbers there’s visual, stores, but the true CRM marketing, we will be spending less on because we are going to be less promotional. The TD spend is up slightly to last year mostly because of rate increases but our TRPs are pretty flat to last year as we continue to support the big launches. As I said earlier, we are trying to make events between the launches much bigger and more powerful and really having a synergy around all product categories within the box. The VSX business we’ll have in 30 stores as we go into late summer as well as the fall. It is still a test and learn and incubation. We do, are taking the top bras and the top pant into 100 stores creating a sport essentials piece of it, so that will be happening starting in April this year. The pink business continues to be a strong business. We’re going up against a lot of promotional activity that we had last year. We have a lot of exciting things that will be happening in pink going into back to school. So we still remain very optimistic about the pink brand and are constantly testing for newness, new fabrications, the expanded square footage that we’ve given to pink is working so I think pink continues to be strong.

Operator let’s take one last question please.

Richard Jaffe with Stifel, you may ask your question. Richard Jaffe – Stifel Nicolaus: Thanks very much, really a follow on question to Bath and Body Works and I guess it’s a slippery slope you found yourself on in December that is promotions in the fourth quarter undermined the success of the sale. I’m just wondering in the near term let’s say going into the Spring sale event how you anticipate that will change and how you’ll be able to still drive sales without promotions on a rotating promotions this Spring, or should we really look to a change in the promotional cadence in the second half?

As I mentioned earlier we are definitely have a change in the promotional cadence throughout the Spring season but the difference I think in January annual sale versus June is the business leading up to both of those events. Our holiday business is pretty enormous and what that does to the January sale is significantly different than what our May-June business will do, or excuse me our April-May business will do to the June sales. So I don’t have as many concerns with that sale.

Thanks, that concludes our year end earnings call for this morning, we thank everyone for their continuing interest in Limited Brands.