10-K405

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the fiscal year ended February 3, 2001

OR

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from                to                

Commission file number 1-13814

INTIMATE BRANDS, INC.
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	31-1436998 (IRS Employer Identification No.)
Three Limited Parkway, P.O. Box 16000, Columbus, Ohio (Address of principal executive offices)	43230 (Zip Code)

Registrant's telephone number, including area code (614) 415-8000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Class A Common Stock, $.01 Par Value	The New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None.

    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15 (d) of the Securities Exchange Act of 1934 during the proceeding 12 months and (2) has been subject to the filing requirements for the past 90 days. Yes /x/  No / /

    Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of the Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy information statements incorporated by reference in Part III of this Form 10-K or any amendment to this form 10-K. /x/

    Aggregate market value of the registrant's Common Stock held by non-affiliates of the registrant as of March 30, 2001: $1,141,492,544.

    Number of shares outstanding of the registrant's Common Stock as of March 30, 2001: 79,292,144 shares of Class A common stock; 411,635,902 shares of Class B common stock.

DOCUMENTS INCORPORATED BY REFERENCE:

    Portions of the registrant's annual report to shareholders for the fiscal year ended February 3, 2001 are incorporated by reference into Part I, Part II and Part IV, and portions of the registrant's proxy statement for the Annual Meeting of Shareholders scheduled for May 21, 2001 are incorporated by reference into Part III.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:

    The Company cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this Annual Report on Form 10-K ("Report") or made by management of the Company involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond the Company's control. Accordingly, the Company's future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Words such as "estimate," "project," "plan," "believe," "expect," "anticipate," "intend" and similar expressions may identify forward-looking statements. The following factors, among others, in some cases have affected and in the future could affect the Company's financial performance and actual results and could cause actual results for 2001 and beyond to differ materially from those expressed or implied in any forward-looking statements included in this Report or otherwise made by management: changes in consumer spending patterns, consumer preferences and overall economic conditions; the impact of competition and pricing; changes in weather patterns; political stability; postal rate increases and charges; paper and printing costs; risks associated with the seasonality of the retail industry; risks related to consumer acceptance of the Company's products and the ability to develop new merchandise; the ability to retain, hire and train key personnel; risks associated with the possible inability of the Company's manufacturers to deliver products in a timely manner; risks associated with relying on foreign sources of production and availability of suitable store locations on appropriate terms.

    Refer to Exhibit 99.1 for cautionary statements relating to forward-looking information.

    The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.

PART I

Item 1. Business.

General.

    Intimate Brands, Inc., a Delaware corporation (the "Company") includes specialty retail stores and direct response (catalog and e-commerce) businesses, which offer women's intimate and other apparel, personal care products and accessories. The Company consists of Victoria's Secret Stores, Victoria's Secret Direct, and Bath & Body Works. The Limited, Inc. ("The Limited") owns approximately 84% of the outstanding common stock of the Company, which initiated public ownership on October 24, 1995.

Description of Operations.

General.

    As of February 3, 2001, the Company operated retail lingerie and personal care businesses (Victoria's Secret Stores and Bath & Body Works) and a direct response (catalog and e-commerce) business selling lingerie and other women's apparel (Victoria's Secret Direct). The following chart reflects the number of stores in operation at February 3, 2001 and January 29, 2000.

	Number of Stores
Retail Businesses	February 3, 2001	January 29, 2000
Victoria's Secret Stores	958	896
Bath & Body Works	1,432	1,214
Total	2,390	2,110

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    The following table shows the changes in the number of retail stores operated by the Company for the past five fiscal years:

Fiscal Year	Beginning of Year	Opened	Closed		End of Year
1996	1,293	325	(9	)	1,609
1997	1,609	233	*(132	)	1,710
1998	1,710	201	(21	)	1,890
1999	1,890	241	(21	)	2,110
2000	2,110	305	(25	)	2,390

*

Includes 118 stores from the January 31, 1998 closing of Cacique.

    During fiscal year 2000, the Company purchased merchandise from approximately 890 suppliers and factories located throughout the world. The Company sourced approximately 30% of its merchandise through Mast Industries, Inc., a wholly-owned contract manufacturing subsidiary of The Limited. In addition to purchases from Mast, the Company purchases merchandise directly in foreign markets and in the domestic market, some of which is manufactured overseas. No more than 5% of goods purchased originated from any single manufacturer.

    Most of the merchandise and related materials for the Company's retail stores and direct response (catalog and e-commerce) businesses is shipped to distribution centers owned by The Limited in the Columbus, Ohio area, where the merchandise is received and inspected. The Limited uses common and contract carriers to distribute merchandise and related materials to the Company's stores. The Company pays outbound freight for stores to The Limited based on weight shipped. Victoria's Secret Direct, which represents the direct response business, contracts and ships to its customers via independent third parties including the U.S. Postal Service. The Company's divisions generally have dedicated distribution facilities and capabilities and no division receives priority over any other division. There are no distribution channels between the retail divisions.

    The Company's policy is to maintain sufficient quantities of inventory on hand in its retail stores and distribution centers so that it can offer customers an appropriate selection of current merchandise. The Company emphasizes rapid turnover and takes markdowns where required to keep merchandise fresh and current with fashion trends.

    The Company views the retail apparel market as having two principal selling seasons, spring and fall. As is consistent with the apparel industry, the Company experiences its peak sales activity during the fall season. This seasonal sales pattern results in increased inventory during the fall and Christmas holiday selling periods. During fiscal year 2000, the highest inventory level was $890 million at November 2000 month-end and the lowest inventory level was $598 million at February 2000 month-end.

    Merchandise sales are paid for with cash, by personal check, and with credit cards issued by third parties or The Limited's 31%-owned credit card processing venture, Alliance Data Systems.

    The Company offers its customers a return policy stated as "No Sale is Ever Final." The Company believes that certain of its competitors offer similar service policies.

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    The following is a brief description of the Company's operating businesses.

Retail Businesses

Victoria's Secret Stores—is the leading specialty retailer of women's intimate apparel and related products. Victoria's Secret Stores had net sales of $2.339 billion in 2000 and operated 958 stores nationwide.

Victoria's Secret Beauty—is a leading specialty retailer of high quality beauty products. Victoria's Secret Beauty had net sales of $534 million in 2000 and operated 80 stand-alone stores and 400 side-by-side locations and niches within Victoria's Secret lingerie stores. Victoria's Secret Beauty stores and sales are consolidated within Victoria's Secret Stores in the preceding paragraph and in the 2000 Annual Report.

Bath & Body Works—is the leading specialty retailer of personal care products. Launched in 1990, Bath & Body Works (including White Barn Candle Company) had net sales of $1.785 billion in 2000 and operated 1,432 stores nationwide.

Direct Response Business

Victoria's Secret Direct—is a leading catalog and e-commerce retailer of intimate and other women's apparel. Victoria's Secret Direct mailed approximately 368 million catalogs and had net sales of $962 million in 2000. Through its web site, www.VictoriasSecret.com, certain of its products may be purchased worldwide.

    Additional information about the Company's business, including its revenues and profits for the last three years and selling square footage, is set forth under the caption "Management's Discussion and Analysis" of the 2000 Annual Report, and is incorporated herein by reference. For the financial results of the Company's reportable operating segments, see Note 13 of the Notes to the Consolidated Financial Statements included in the 2000 Annual Report, incorporated herein by reference.

Competition.

    The sale of women's intimate and other apparel, personal care products and accessories through retail stores is a highly competitive business with numerous competitors, including individual and chain fashion specialty stores, and department stores. Brand image, marketing, fashion design, price, service, fashion selection and quality are the principal competitive factors in retail store sales. The Company's direct response business competes with numerous national and regional catalog and e-commerce merchandisers. Brand image, marketing, fashion design, price, service, quality image presentation and fulfillment are the principal competitive factors in catalog and e-commerce sales.

    The Company is unable to estimate the number of competitors or its relative competitive position due to the large number of companies selling apparel, lingerie and personal care products through retail stores, catalogs and e-commerce.

Associate Relations.

    On February 3, 2001, the Company employed approximately 69,000 associates, 53,000 of whom were part-time. In addition, temporary associates are hired during peak periods, such as the holiday season.

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Item 2. Properties.

    The Company's business is principally conducted from office, distribution and shipping facilities located in the Columbus, Ohio area. Additional facilities are located in New York City, New York, Kettering, Ohio, and Rio Rancho, New Mexico.

    The distribution and shipping facilities are owned by The Limited and are leased by the Company under fifteen year leases, with options to renew.

    Substantially all of the retail stores operated by the Company are located in leased facilities, primarily in shopping centers throughout the continental United States. The leases expire at various dates principally between 2000 and 2020 and frequently have renewal options.

    Typically, when space is leased for a retail store in a shopping center, all improvements, including interior walls, floors, ceilings, fixtures and decorations, are supplied by the tenant. In certain cases, the landlord of the property may provide a construction allowance to fund all or a portion of the cost of improvements. The cost of improvements varies widely, depending on the size and location of the store. Rental terms for locations usually include a fixed minimum rent plus a percentage of sales in excess of a specified amount. Certain operating costs such as common area maintenance, utilities, insurance and taxes are typically paid by tenants.

Item 3. Legal Proceedings.

    The Company is a defendant in a variety of lawsuits arising in the ordinary course of business.

    On January 13, 1999, two complaints were filed against the Company's parent, The Limited, and one of its subsidiaries, as well as other defendants, including many national retailers. Both complaints relate to labor practices allegedly employed on the island of Saipan, Commonwealth of the Northern Mariana Islands, by apparel manufacturers unrelated to The Limited (some of which have sold goods to The Limited) and seek injunctions, unspecified monetary damages, and other relief. One complaint, on behalf of a class of unnamed garment workers, filed in the United States District Court for the Central District of California, Western Division, alleges violations of federal statutes, the United States Constitution, and international law. On April 12, 1999, a motion to dismiss that complaint for failure to state a claim upon which relief can be granted was filed, and it remains pending. On September 29, 1999, the United States District Court for the Central District of California, Western Division, transferred the case to the United States District Court for the District of Hawaii. A first amended complaint was filed on April 28, 2000, which adds additional defendants but does not otherwise substantively alter the claims alleged or relief sought. On June 23, 2000, the United States District Court for the District of Hawaii transferred the case to the United States District Court for the District of the Northern Mariana Islands, and on July 7, 2000 denied plaintiffs' motion for reconsideration of the transfer order. Plaintiffs filed a Petition for a Writ of Mandamus challenging the transfer order and Motion for Emergency Stay which was denied by a panel of the U.S. 9^th Circuit Court of Appeals on March 22, 2001. Plaintiffs have indicated an intention to seek a rehearing en banc. The second complaint, filed by a national labor union and other organizations in the Superior Court of the State of California, San Francisco County, and which alleges unfair business practices under California law, remains pending.

    Although it is not possible to predict with certainty the eventual outcome of any litigation, in the opinion of management, the foregoing proceedings are not expected to have a material adverse effect on the Company's financial position or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders.

    Not applicable.

5

Supplemental Item. Executive Officers of The Registrant.

    Set forth below is certain information regarding the executive officers of the Company.

    Leslie H. Wexner, 63, has been Chairman of the Board and Chief Executive Officer of the Company since 1995. Mr. Wexner has been Chief Executive Officer of The Limited since he founded The Limited in 1963 and has been Chairman of the Board of Directors of The Limited for more than five years.

    Grace A. Nichols, 54, has been President and Chief Executive Officer of Victoria's Secret Stores, Inc. since January 1991, and assumed such position with the Company in 1995. Ms. Nichols has also been a member of the Board of Directors of the Company since 1995. Prior to her position as President, Ms. Nichols held the position of Executive Vice President, General Merchandise Manager from 1988 to 1991 and Vice President, General Merchandise Manager from 1986 to 1988 at Victoria's Secret Stores.

    Beth M. Pritchard, 54, has been President and Chief Executive Officer of Bath & Body Works, Inc. since November 1993 and assumed such position with the Company in 1995. Ms. Pritchard has also been a member of the Board of Directors of the Company since 1995. Ms. Pritchard served as Chief Executive Officer of Victoria's Secret Bath and Fragrance from June 1996 to March 1998. For approximately one and one-half years prior to assuming her position with Bath & Body Works, Ms. Pritchard held the position of Executive Vice President and General Manager at Bath & Body Works. From 1991 until 1993, she was Executive Vice President at Express, a business operated by The Limited.

    Leonard A. Schlesinger, 48, has been an executive officer of the Company since May 2000. Mr. Schlesinger has also been Executive Vice President and Chief Operating Officer of The Limited since March 2001 and was Executive Vice President, Organization, Leadership and Human Resources of The Limited from October 1999 until March 2001. Mr. Schlesinger was a Professor of Sociology and Public Policy and Senior Vice President for Development at Brown University from 1998 to 1999. He was also Professor of Business Administration at Harvard Business School ("Harvard") from 1988 to 1998 and served as the Senior Associate Dean and Director of External Relations at Harvard from July 1994 until October 1995.

    Tracey Thomas Travis, 38, was appointed to Vice President, Finance and Chief Financial Officer of the Company on April 9, 2001. Ms. Travis was Chief Financial Officer for Rexam Beverage Can Americas from April 1999 to February 2001. Prior to Rexam, Ms. Travis held various finance and general management positions at the Pepsi-Cola Company from 1989 to 1999.

    All of the above officers serve at the pleasure of the Board of Directors of the Company.

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PART II

Item 5. Market for The Registrant's Common Equity and Related Stockholder Matters.

    Information regarding markets in which the Company's common stock was traded during fiscal year 2000 and 1999, approximate number of holders of common stock, and quarterly cash dividend per share information of the Company's common stock for the fiscal year 2000 and 1999 is set forth under the caption "Market Price and Dividend Information" on page 35 of the 2000 Annual Report and is incorporated herein by reference.

Item 6. Selected Financial Data.

    Selected financial data is set forth under the caption "Ten-Year Selected Financial Data" on page 26 of the 2000 Annual Report and is incorporated herein by reference.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

    Management's discussion and analysis of financial condition and results of operations is set forth under the caption "Management's Discussion and Analysis" on pages 27 through 29 of the 2000 Annual Report and is incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

    The information required by this item is set forth on pages 29 and 34 of the 2000 Annual Report and is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data.

    The Consolidated Financial Statements of the Company and subsidiaries, the Notes to Consolidated Financial Statements and the Report of Independent Accountants are set forth in the 2000 Annual Report and are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

    None.

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PART III

Item 10. Directors and Executive Officers of The Registrant.

    Information regarding directors of the Company is set forth under the captions "ELECTIONS OF DIRECTORS—Nominees and directors", "—Information concerning the Board of Directors", "Committees of the Board of Directors" and "—Security ownership of directors and management" on pages 5 through 9 of the Company's proxy statement for the Annual Meeting of Shareholders to be held on May 21, 2001 (the "Proxy Statement") and is incorporated herein by reference. Information regarding compliance with Section 16 (a) of the Securities Exchange Act of 1934, as amended, is set forth under the caption "EXECUTIVE COMPENSATION—Section 16 (a) beneficial ownership reporting compliance" on page 16 of the Proxy Statement and is incorporated herein by reference. Information regarding the executive officers is set forth herein under the caption "SUPPLEMENTAL ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT" in Part I.

Item 11. Executive Compensation.

    Information regarding executive compensation is set forth under the caption "EXECUTIVE COMPENSATION" on pages 12 through 16 of the Proxy Statement and is incorporated herein by reference. Such incorporation by reference shall not be deemed to specifically incorporate by reference the information referred to in Item 402 (a) (8) of Regulation S-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

    Information regarding the security ownership of certain beneficial owners and management is set forth under the captions "ELECTION OF DIRECTORS—Security ownership of directors and management" on pages 8 and 9 of the Proxy Statement and "SHARE OWNERSHIP OF PRINCIPAL STOCKHOLDERS" on page 21 of the Proxy Statement and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions.

    Information regarding certain relationships and related transactions is set forth under the caption "ELECTION OF DIRECTORS—Nominees and directors" on pages 5 and 6 of the Proxy Statement and is incorporated herein by reference.

    The Company's Certificate of Incorporation includes provisions relating to potential conflicts of interest that may arise between the Company and The Limited. Such provisions were adopted in light of the fact that the Company and The Limited and its subsidiaries are engaged in retail businesses and may pursue similar opportunities in the ordinary course of business. Among other things, these provisions generally eliminate the liability of directors and officers of the Company with respect to certain matters involving The Limited and its subsidiaries or the Company. Any person purchasing or acquiring an interest in shares of capital stock of the Company will be deemed to have consented to such provisions relating to conflicts of interest and corporate opportunities, and such consent may restrict such person's ability to challenge transactions carried out in compliance with such provisions. Investors should review the Company's Certificate of Incorporation before making any investment in shares of the Company's capital stock.

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PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

(a)(1)	List of Financial Statements.
	The following consolidated financial statements of Intimate Brands, Inc. and subsidiaries and the related notes are filed as a part of this report pursuant to ITEM 8:
		Consolidated Statements of Income for the fiscal years ended February 3, 2001, January 29, 2000 and January 30, 1999.
		Consolidated Balance Sheets as of February 3, 2001 and January 29, 2000.
		Consolidated Statements of Shareholders' Equity for the fiscal years ended February 3, 2001, January 29, 2000 and January 30, 1999.
		Consolidated Statements of Cash Flows for the fiscal years ended February 3, 2001, January 29, 2000 and January 30, 1999.
		Notes to Consolidated Financial Statements.
		Report of Independent Accountants.
(a)(2)	List of Financial Statement Schedules.
	All schedules required to be filed as part of this report pursuant to ITEM 14(d) are omitted because the required information is either presented in the financial statements or notes thereto, or is not applicable, required or material.
(a)(3)	List of Exhibits.
	3.	Articles of Incorporation and Bylaws.
		3.1.	Amended and Restated Certificate of Incorporation of the Company incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended October 28, 1995.
		3.2.	Bylaws of the Company adopted October 20, 1995 and as amended April 1, 1999 incorporated by reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K for fiscal year ended January 30, 1999.
	4.	Instruments Defining the Rights of Security Holders.
		4.1.	Specimen Certificate of Class A Common Stock of the Company incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-1 (File No. 33-92568) (the "Form  S-1").
		4.2.	Certificate of Incorporation of The Limited, Inc. incorporated by reference to Exhibit 4.2 to the Company's Form S-1.
		4.3.	Restated Bylaws of The Limited, Inc. incorporated by reference to Exhibit 4.3 to the Company's Annual Report on Form 10-K for fiscal year ended January 30, 1999.
	10.	Material Contracts.
		10.1.	Services Agreement by Intimate Brands, Inc. and The Limited, Inc., dated October 23, 1995 incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended October 28, 1995.
		10.2.	Credit Card Processing Agreement by World Financial Network National Bank and Victoria's Secret Stores, Inc., dated October 23, 1995 incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended October 28, 1995.

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10.3.	Credit Card Processing Agreement by World Financial Network National Bank and Victoria's Secret Catalogue, Inc., dated October 23, 1995 incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarter ended October 28, 1995.
10.4.	Corporate Agreement by Intimate Brands, Inc. and The Limited, Inc., dated October 23, 1995 incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarter ended October 28, 1995.
10.5.	Tax Sharing Agreement by Intimate Brands, Inc. and The Limited, Inc., dated October 23, 1995 incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarter ended October 28, 1995.
10.6.	Lease Agreement by and between Distribution Land Corp. and Victoria's Secret Stores, Inc., dated January 31, 1999.
10.7.	Building Lease Agreement by Distribution Land Corp. and Victoria's Secret Catalogue, Inc., dated June 1, 1995 incorporated by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for the quarter ended October 28, 1995.
10.8.	Lease Agreement by and between Distribution Land Corp. and Bath & Body Works, Inc., dated January 31, 1999.
10.9.	Not Used.
10.10.	Not Used.
10.11.	Not Used.
10.12.	Shared Facilities Agreement by The Limited London-Paris-New York, Inc. and Bath & Body Works, Inc., dated October 25, 1995 incorporated by reference to Exhibit 10.12 to the Company's Quarterly Report on Form 10-Q for the quarter ended October 28, 1995.
10.13.	Shared Facilities Agreement by Structure, Inc. and Bath & Body Works, Inc., dated October 25, 1995 incorporated by reference to Exhibit 10.13 to the Company's Quarterly Report on Form  10-Q for the quarter ended October 28, 1995.
10.14.	Shared Facilities Agreement by The Limited London-Paris-New York, Inc. and Victoria's Secret Stores, Inc., dated October 25, 1995 incorporated by reference to Exhibit 10.14 to the Company's Quarterly Report on Form 10-Q for the quarter ended October 28, 1995.
10.15.	Shared Facilities Agreement by Express, Inc. and Bath & Body Works, Inc., dated October 25, 1995 incorporated by reference to Exhibit 10.15 to the Company's Quarterly Report on Form 10-Q for the quarter ended October 28, 1995.
10.16.	Shared Facilities Agreement by The Limited London-Paris-New York, Inc. and Victoria's Secret Stores, Inc., dated October 25, 1995 incorporated by reference to Exhibit 10.16 to the Company's Quarterly Report on Form 10-Q for the quarter ended October 28, 1995.
10.17.	Not Used.
10.18.	Not Used.
10.19.	Shared Facilities Agreement by Express, Inc. and Victoria's Secret Stores, Inc., dated October 25, 1995 incorporated by reference to Exhibit 10.20 to the Company's Quarterly Report on Form 10-Q for the quarter ended October 28, 1995.

10

		10.20.	Shared Facilities Agreement by Lerner New York, Inc. and Bath & Body Works, Inc., dated October 25, 1995 incorporated by reference to Exhibit 10.21 to the Company's Quarterly Report on Form  10-Q for the quarter ended October 28, 1995.
		10.21.	Not Used.
		10.22.	Shared Facilities Agreement by Express, Inc. and Victoria's Secret Stores, Inc., dated October 25, 1995 incorporated by reference to Exhibit 10.23 to the Company's Quarterly Report on Form 10-Q for the quarter ended October 28, 1995.
		10.23.	Intimate Brands, Inc. 1995 Stock Option and Performance Incentive Plan incorporated by reference to Exhibit B to the Company's Proxy Statement dated April 14, 1997.
		10.24.	Intimate Brands, Inc. Incentive Compensation Performance Plan incorporated by reference to Exhibit A to the Company's Proxy Statement dated April 14, 1997.
		10.25.	Intimate Brands, Inc. 1995 Stock Plan for Non-Associate Directors incorporated by reference to Exhibit 10.26 to the Company's Quarterly Report on Form 10-Q for the quarter ended October 28, 1995.
		10.26.	Form of Indemnification Agreement between the Company and the directors and officers of the Company incorporated by reference to Exhibit 10.27 to the Company's Annual Report on Form 10-K for the year ended February 3, 1996.
		10.27.	Supplemental Schedule of Directors and Executive Officers who are Parties to an Indemnification Agreement, incorporated by reference to Exhibit 10.27 to the Company's Annual Report on Form 10-K for the year ended January 30, 1999.
		10.28.	Form of Indemnification Agreement between the Company and a Director of the Company.
	13.	Excerpts from the 2000 Annual Report to Shareholders, including "Ten-Year Selected Financial Data", "Management's Discussion and Analysis", "Financial Statements and Notes," and "Report of Independent Accountants" on pages 26-35.
	21.	Subsidiaries of the Registrant.
	23.	Consent of Independent Accountants.
	24.	Powers of Attorney.
	99.	Annual Report of The Limited, Inc. Savings and Retirement Plan.
	99.1	Cautionary Statements Relating to Forward-Looking Information.
(b)	Reports on Form 8-K.
	None.
(c)	Exhibits.
	The exhibits to this report are listed in section (a)(3) of Item 14 above.
(d)	Financial Statement Schedule.
	Not applicable.

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SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: April 24, 2001
	INTIMATE BRANDS, INC. (registrant)
	By:	/s/ TRACEY THOMAS TRAVIS Tracey Thomas Travis Vice President, Finance and Chief Financial Officer

    Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on January 26, 2001, unless otherwise noted:

Signature	Title
/s/ LESLIE H. WEXNER*	Chairman of the Board of Directors, President and Chief Executive Officer
/s/ ROGER D. BLACKWELL*	Director
/s/ E. GORDON GEE*	Director
/s/ WILLIAM E. KIRWAN*	Director
/s/ GRACE A. NICHOLS*	Director
/s/ BETH M. PRITCHARD*	Director
/s/ DONALD B. SHACKELFORD*	Director
/s/ DONNA A. JAMES*	Director (as of March 23, 2001)

*

The undersigned, by signing his name hereto, does hereby sign this report on behalf of each of the above-indicated directors of the registrant pursuant to powers of attorney executed by such directors.

By:
/s/ V. ANN HAILEY V. Ann Hailey
Attorney-in-fact

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

INTIMATE BRANDS, INC.
(exact name of Registrant as specified in its charter)

EXHIBITS

EXHIBIT INDEX

Exhibit No.	Document
10.6	Lease Agreement by and between Distribution Land Corp. and Victoria's Secret Stores, Inc., dated January 31, 1999.
10.8	Lease Agreement by and between Distribution Land Corp. and Bath & Body Works, Inc., dated January 31, 1999.
10.28	Form of Indemnification Agreement between the Company and a Director of the Company.
13	Excerpts from the 2000 Annual Report to Shareholders, including "Ten-Year Selected Financial Data", "Management's Discussion and Analysis", "Financial Statements and Notes", and "Report of Independent Accountants" on pages 26-35.
21	Subsidiaries of the Registrant.
23	Consent of Independent Accountants.
24	Powers of Attorney.
99	Annual Report of The Limited, Inc. Savings and Retirement Plan.
99.1	Cautionary Statements Relating to Forward-Looking Information.

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DOCUMENTS INCORPORATED BY REFERENCE:
PART I

Item 1. Business.
Item 2. Properties.
Item 3. Legal Proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.

PART II

Item 5. Market for The Registrant's Common Equity and Related Stockholder Matters.
Item 6. Selected Financial Data.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Item 8. Financial Statements and Supplementary Data.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

PART III

Item 10. Directors and Executive Officers of The Registrant.
Item 11. Executive Compensation.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Item 13. Certain Relationships and Related Transactions.

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

SIGNATURES
EXHIBIT INDEX

EX-10.6

                                                                   Exhibit 10.6

                                                  VICTORIA'S SECRET STORES, INC.



                                 LEASE AGREEMENT



                  This Lease Agreement (this "Lease") is entered into and made
as of the 31st day of January, 1999, by and between Distribution Land Corp., a
Delaware corporation (hereinafter referred to as "Landlord") and Victoria's
Secret Stores, Inc., a Delaware corporation (hereinafter referred to as
"Tenant").


                              W I T N E S S E T H:


                  WHEREAS, Landlord owns a certain office/warehouse distribution
facility containing approximately 1,012,278 square feet of floor space
identified on EXHIBIT A attached hereto and made a part hereof by this reference
(the "Building"); and

                  WHEREAS, the Building is located upon an approximately 321.1
acre parcel of land located at the intersection of East Broad Street (State
Route 16) and Taylor Road, Reynoldsburg, Ohio, which land is depicted on EXHIBIT
A attached hereto and made a part hereof by this reference (the "Campus"); and

                  WHEREAS, Landlord wishes to lease to Tenant a portion of the
Building as more particularly described in Section 1.02 below (the "Premises")
and to grant to Tenant the right to utilize certain common areas and facilities
located within the Building and the Campus, all subject to the terms and
conditions of this Lease; and

                  WHEREAS, Tenant wishes to lease, from Landlord, a portion of
the Building and to utilize those certain common areas and facilities located
within the Building and the Campus.

                  NOW, THEREFORE, in consideration of the premises described
above and the mutual promises set forth herein, Landlord and Tenant, intending
to be legally bound, hereby agree as follows:




I -- LEASE OF PREMISES

                  1.01 - LEASE OF PREMISES. Landlord, in consideration of the
rents and covenants hereinafter set forth, does hereby demise, let and lease to
Tenant, and Tenant does hereby hire, take and lease from Landlord, on the terms
and conditions hereinafter set forth, the Premises, to have and to hold the
same, with all appurtenances unto Tenant for the Term hereinafter specified.

                  1.02 - BASIC LEASE PROVISIONS.

                  A.       Building Address:   8455 East Broad Street
                                               Reynoldsburg, Ohio 43068

                  B.       Building Description: an office/warehouse
                           distribution facility, containing approximately
                           223,426 square feet of office space, 773,640 square
                           feet of distribution space and 15,212 square feet of
                           Building Common Area (as hereinafter defined)

                  C.       Premises Description: the floors of the Building on
                           which the Premises are located and the square footage
                           of the Premises are depicted on the floor plan
                           attached hereto as Exhibit B and made a part hereof
                           by this reference.

                  D.       Term: Fifteen (15) years, beginning on January 31,
                           1999 (the "Commencement Date") and ending on January
                           30, 2014 (the "Expiration Date")

                  E.       Annual Rent:

                           (i)      Office space and Pro Rata Share of Building
                                    Common Areas - $16.15 per square foot, or
                                    $2,366,863.25

                           (ii)     Distribution space - $4.35 per square foot,
                                    or $2,244,478.20

                           (iii)    Total Annual Rent of $4,611,341.45

                           (iv)     The Annual Rent shall be subject to periodic
                                    adjustments as provided in Section 4.02 of
                                    this Lease

                  F.       Monthly Installments of Rent: $384,278.45

                  G.       Renewal Option(s): three (3) five (5) year Renewal
                           Option(s) - See Section 4.05 of this Lease for terms
                           of the Renewal Options


                                      -2-


                  H.       Addresses for Notices and Payments:

                           Tenant:          Victoria's Secret Stores, Inc.
                                            8455 East Broad Street
                                            Reynoldsburg, Ohio  43068

                           with a copy to:

                                            Victoria's Secret Stores, Inc.
                                            Three Limited Parkway
                                            Columbus, Ohio  43230
                                            Attention: Corporate Real Estate
                                            Department

                           Landlord:        Distribution Land Corp.
                                            Three Limited Parkway
                                            Columbus, Ohio  43230

                           with a copy to:

                                            Distribution Land Corp.
                                            Three Limited Parkway
                                            Columbus, Ohio  43230
                                            Attention: Corporate Real Estate
                                            Department

                  I.       Use: office/warehouse distribution use related to
                           distribution for retail sale of men's, women's and
                           children's apparel, accessories, personal care items
                           and other products, and for all administrative
                           activities relating thereto

                  1.03 - DESCRIPTION OF THE BUILDING, THE PREMISES AND THE
                         COMMON AREAS.

                  J. THE BUILDING. The Building is depicted on the attached
Exhibit A. The address and description of the Building are specified in Items A
and B of the Basic Lease Provisions (which are set forth in Section 1.02 of this
Lease).

                  K. THE PREMISES. The Premises consist of space which: (i) is
located on the floor or floors of the Building designated on the attached
EXHIBIT B, (ii) is located in one or more areas or parts of each such floor, and
(iii) is bound by the proposed or existing demising walls therefor, the
approximate locations of such demising walls and space being marked in color or
cross-hatched and shown on the diagram of the floor plan for each such floor,
such diagram being attached to this Lease as EXHIBIT B and made a part hereof by
this reference. The Premises also include that portion of the Building Common
Areas (as defined in Section 1.03(L) of this Lease) which has been allocated to
Tenant on the basis of the square footage of office space designated for
Tenant's use in items (i), (ii) and (iii) above divided by the total square
footage of office space located within the Building ("Pro Rata Share of Building
Common Areas"). The


                                      -3-


approximate number of square feet contained in the area which comprises the
Premises is also specified on EXHIBIT B.

                  L. COMMON AREAS. The Building is located within, and
constitutes a part of, the Campus. The Campus has been improved with the
Building, additional buildings and structures not subject to this Lease,
security buildings and facilities and roadways, driveways, walkways, parking
areas, loading areas, fences, walls, hedges, plantings, poles, ponds, lakes,
signs, utility improvements, trees, plantings and other landscaping features
(the Campus, excluding the Building, being referred to herein as the "Campus
Common Areas"). The Building contains certain areas or parts which are
designated for use in common by all of the tenants of the Building and their
respective employees, agents, customers, and invitees. Such areas include
entrances, exits and doors, lobbies, hallways, corridors and stairwells,
elevators and restrooms, but excluding certain "special amenities" such as the
cafeteria, mail room and reception area (all of which are referred to herein as
the "Building Common Areas"). The Campus Common Areas and the Building Common
Areas are sometimes referred to herein collectively as the "Common Areas".


II -- COMMON AREAS

                  2.01 - USE OF BUILDING COMMON AREAS. Subject to Landlord's
right at any time to use the Building Common Areas for its own purposes and the
right of any other tenant to operate the Building Common Areas, Landlord hereby
gives to Tenant and its employees, agents, customers and invitees, the
nonexclusive right to use the Building Common Areas in common with and subject
to the rights given to other tenants of the Building.

                  2.02 - USE OF CAMPUS COMMON AREAS. Subject to Landlord's right
at any time to use the Campus Common Areas for its own purposes, Landlord hereby
gives to Tenant and its employees, agents, customers and invitees, the
nonexclusive right to use the Campus Common Areas.

                  2.03 - RULES AND REGULATIONS FOR COMMON AREAS. The Campus
Common Areas and the Building Common Areas shall at all times be subject to the
exclusive management and control of Landlord which shall have the right, from
time to time, to establish, modify and enforce reasonable rules and regulations
with respect to all such Common Areas, and the use of such Campus Common Areas
and the Building Common Areas by Tenant, its subtenants and their respective
employees, agents, customers and invitees shall be subject to such rules and
regulations. Such rules and regulations may include, but shall not be limited
to, restrictions on parking, hours of operation, access routes, hours of access
to the Building and the Campus, rules with respect to the Building and such
other matters as may be deemed appropriate by Landlord from time to time.

                  2.04 - CHANGES IN COMMON AREAS. Landlord may do and perform
such acts in and to the Campus Common Areas and the Building Common Areas,
respectively, as it shall determine to be advisable. Landlord hereby reserves
the right to make reconfigurations,


                                      -4-


alterations, additions, deletions or changes to the Campus Common Areas and
Building Common Areas, respectively, including, but not limited to, changes
in the size and configuration of said Common Areas. Landlord reserves the
right to restrict and limit the use of the Campus Common Areas and Building
Common Areas, respectively, by Tenant, its subtenants and their respective
employees, agents, customers and invitees.

                  2.05 - MAINTENANCE OF COMMON AREAS. Subject to the provisions
of Section 4.03 hereof, Landlord shall adequately maintain the Campus Common
Areas and Building Common Areas, respectively, in a good and usable condition
throughout the Term of this Lease.

                  2.06 - COMMON AREA CAPITAL IMPROVEMENTS. Landlord may make
capital improvements to the Campus Common Areas and Building Common Areas,
respectively.


III -- TERM AND POSSESSION

                  3.01 - TERM. The Term of this Lease shall be for the period of
years and months specified in Item D of the Basic Lease Provisions; and shall
begin and end on the Commencement Date and Expiration Date, respectively,
specified in Item D of the Basic Lease Provisions, unless the Term of this Lease
is renewed, modified or terminated as provided elsewhere herein.

                  3.02 - TENANT'S ACCEPTANCE OF THE PREMISES. Tenant hereby
accepts the Premises in an "as is" condition and acknowledges that Landlord has
made no representations or warranties with respect thereto, and that Tenant has
inspected the Premises and found it to be in satisfactory condition.

                  3.03 - SURRENDER OF THE PREMISES. Upon the expiration or
earlier termination of this Lease, or upon the exercise by Landlord of its right
to re-enter the Premises without terminating this Lease, Tenant shall
immediately surrender the Premises to Landlord, together with all alterations,
improvements and other property as provided elsewhere herein, in broom-clean
condition and in good order, condition and repair, except for ordinary wear and
tear and damage which Tenant is not obligated to repair, failing which Landlord
may restore the Premises to such condition at Tenant's expense. Upon such
expiration or termination, Tenant may, provided Tenant is not in default and
unless prohibited from doing so by other provisions of this Lease, have the
right to remove its personal property and trade fixtures. Tenant shall promptly
repair any damage caused by any such removal, and shall restore the Premises to
the condition existing prior to the installation of the items so removed,
ordinary wear and tear and damage which Tenant is not obligated to repair
excepted. If Tenant fails to remove any and all such trade fixtures from the
Premises on the Expiration Date or earlier termination of this Lease, all such
trade fixtures shall become the Property of Landlord, unless Landlord elects to
require their removal, in which case Tenant shall, at its cost, promptly remove
the same and restore the Premises to its prior condition.


                                     -5-



                  3.04 - HOLDING OVER. In the event that Tenant shall not
immediately surrender the Premises on the Expiration Date of the Term hereof,
Tenant shall, by virtue of the provisions hereof, become a tenant by the month
at the monthly rent in effect during the last month of the Term of this Lease,
which monthly tenancy shall commence with the first day next after the
Expiration Date. Tenant, as a monthly tenant, shall be subject to all of the
terms, conditions, covenants and agreements of this Lease. Tenant shall give to
Landlord at least thirty (30) calendar days written notice of any intention to
quit the Premises, and Tenant shall be entitled to thirty (30) calendar days
written notice to quit the Premises, unless Tenant is in default hereunder, in
which event Tenant shall not be entitled to any notice to quit, the usual thirty
(30) calendar days notice to quit being hereby expressly waived. Notwithstanding
the foregoing provisions of this Section 3.04, in the event that Tenant shall
hold over after the expiration of the Term of this Lease, and if Landlord shall
desire to regain possession of the Premises promptly at the expiration of the
Term of this Lease, then, at any time prior to Landlord's acceptance of rent
from Tenant as a monthly tenant hereunder, Landlord, at its option, may
forthwith re-enter and take possession of the Premises without process, or by
any legal process in force.

                  3.05 - RENEWAL OPTIONS. So long as Tenant is not in default
under the terms of this Lease, Landlord does hereby grant to Tenant the right
and option to extend and renew the fifteen (15) year Term of this Lease (herein
called the "Initial Term") for three (3) additional period(s) of five (5) years
each (herein the "Renewal Term(s)"), beginning on the date immediately following
the Expiration Date of the Initial Term or the preceding Renewal Term, as
appropriate, upon the same terms, conditions, covenants and provisions as are
provided in this Lease (except the Rent, which will be subject to adjustment as
provided in Section 4.02 hereof). Unless in respect of each Renewal Term
Landlord or Tenant notifies the other party, at least one (1) year prior to the
expiration of the Initial Term or Renewal Term then in effect, of its intent not
to extend and renew the Term of this Lease, then the Tenant shall be deemed to
have exercised its Renewal Option in respect of that Renewal Term. If the
Renewal Option is exercised as provided herein, then this Lease shall be amended
to reflect the changes which will result from such extension of the Term of this
Lease, including the modification to all references in the Lease to the "Term"
thereof (as defined in Section 3.01) to include the Renewal Term as well as the
Initial Term.


IV -- RENT

                  4.01 - RENT.

                  MONTHLY RENT. Commencing on January 31, 1999, Tenant shall pay
to Landlord, as Rent for the Premises, the annual sum specified in Item E of the
Basic Lease Provisions, payable in equal consecutive monthly installments as
specified in Item F of the Basic Lease Provisions, in advance, on or before the
first day of each and every calendar month during the Term of this Lease;
provided, however, that if the Expiration Date shall be a day other than the
first day of a calendar month, the Rent installment for such last fractional
month shall be prorated on the basis of the number of days during the month this
Lease was in effect in relation to the total number of days in such month.


                                     -6-



                  4.02 - RENT ADJUSTMENT.

                  A. CPI ADJUSTMENTS DURING THE INITIAL TERM. Commencing on the
first (1st) anniversary of the Commencement Date and continuing on the same date
every year thereafter during the Initial Term, the Rent due and payable to
Landlord shall be adjusted for the next succeeding year. The adjusted Rent for
each year shall be equal to the Rent paid during the immediately preceding
twelve (12) month period (the "lease year") increased by a percentage equal to
the percentage increase in the CPI (as hereinafter defined) computed by
comparing the CPI figure for that month which is two (2) months prior to the
adjustment date (the "adjustment month") with the CPI figure for the month
occurring twelve (12) months prior to the adjustment month (the "base month").
For example, in computing the percentage increase for the lease year commencing
January 31, 2002, the percentage increase in the CPI would be determined by
comparing the CPI figure for November, 2001, the adjustment month, with the CPI
figure for November, 2000, the base month, and similar comparisons would be made
using the CPI figures for adjustment months and base months every year
thereafter. For the purposes hereof, "CPI" shall mean the Consumer Price Index,
published by the Bureau of Labor Statistics of the United States Department of
Labor, in the column for "all items" in the table titled "Consumer Price Index
for all Urban Consumers: U.S. City average, 1982-1984 = 100".

                  If the CPI at any time herein is no longer published or
issued, Landlord and Tenant shall agree on such other index as is then generally
recognized for determination of purchasing power in the United States.

                  B. ADJUSTMENTS DURING THE RENEWAL TERM. Commencing on the
first day of each Renewal Term the Rent shall be adjusted to an amount which, in
Landlord's reasonable judgment, is equal to the then current market rental rate
for similar buildings, in similar locations and in the same geographic area.
Provided, however, in no event shall the Rent for the Renewal Term be less than
the Rent which was paid by Tenant during the immediately preceding Term.
Commencing on the first anniversary of such date and continuing on the same date
every year thereafter during the Renewal Term, the Rent due and payable to
Landlord shall be adjusted for the next succeeding year. The adjusted Rent for
each year shall be equal to the Rent paid during the immediately preceding 12
month period (the "lease year") increased by a percentage equal to the
percentage increase in the CPI computed by comparing the CPI figure for that
month which is two months prior to the adjustment date (the "adjustment month")
with the CPI figure for the month occurring 12 months prior to the adjustment
month (the "base month"). For example, in computing the percentage increase for
the lease year commencing January 31, 2002, the percentage increase in the CPI
would be determined by comparing the CPI figure for November, 2001, the
adjustment month with the CPI figure for November, 2000, the base month, and
similar comparisons will be made using the CPI figures for adjustment months and
base months every year thereafter.

                  C. EXTRAORDINARY CAPITAL EXPENDITURES. If, during the Term of
this Lease, Landlord should agree to make any extraordinary Capital Improvements
to the Premises, such extraordinary Capital Improvements being the result of
either (i) Tenant's request, or


                                      -7-



(ii) Landlord's determination, in its sole discretion, that, due to Tenant's
activities upon the Premises such improvements are necessary, then Landlord
may either immediately charge Tenant for the costs of all such Capital
Improvements, which costs shall be paid by Tenant within 30 days of
Landlord's request therefor, or add to the Rent (to be paid in monthly
installments), an amount equal to the annual depreciation or amortization
with respect to the cost of such equipment or capital improvement, as
determined by Landlord in accordance with generally accepted accounting
principles, together with interest on such cost or the unamortized balance
thereof at the rate as may have to be paid by or accrued on the books of
Landlord on the unamortized balance.

                  D. EXTRAORDINARY SERVICES. If, during the Term of this Lease,
Landlord provides to Tenant services, including but not limited to repair,
maintenance and janitorial services, (i) in excess of those normally required to
maintain the Building in a manner consistent with similar buildings, in similar
locations in the same geographic areas, and (ii) such extraordinary services are
the result of or made necessary as a result of Tenant's activities within the
Premises, then Landlord shall have the right to calculate the cost of such
extraordinary services and to charge Tenant the cost thereof. All such charges
shall be calculated and charged to Tenant, on a monthly basis, to be paid by
Tenant as Rent hereunder.

                  4.03 - LATE PAYMENT SERVICE CHARGE; INTEREST. In the event any
installment of Rent, or any other amount which may become due under this Lease
is not paid when due, and such nonpayment continues for a period of ten (10)
days after Landlord gives to Tenant written notice of such nonpayment, then, for
each and every such payment, Tenant shall immediately pay a service charge equal
to five percent (5%) of the amount not timely paid, together with interest on
the amount not timely paid at the rate of eight percent (8%) per annum, from the
due date of such payment until paid. The provisions of this Section 4.03 shall
not be construed to extend the date for payment of Rent, or any other amount
which may become due under this Lease, or to relieve Tenant of its obligations
to pay all such items at the time or times herein stipulated, and neither demand
for, nor collection by Landlord of, late payment service charges and interest
pursuant to this Section 4.03 shall be construed as a cure of any default in
payment by Tenant.


V -- USE OF PREMISES

                  5.01 - SPECIFIC USE. The Premises shall be occupied and used
exclusively for the purposes specified in Item I of the Basic Lease Provisions
and for purposes incidental thereto, and shall not be used for any other
purposes.

                  5.02 - COVENANTS REGARDING USE. In connection with its use of
the Premises, Tenant agrees to do the following:

                  A. Tenant shall use the Premises and conduct its business
therein in a safe, careful, reputable and lawful manner; shall keep any garbage,
trash, rubbish or other refuse in sealed containers within the interior of the
Premises until removed and placed in a dumpster or


                                      -8-



other authorized container for the deposit of garbage and refuse, which shall
be located in an area designated by Landlord.

                  B. Tenant shall not commit, nor allow to be committed, in, on
or about the Premises any act of waste, including any act which might deface,
damage or destroy the Premises or any part thereof; use or permit to be used
within the Premises any hazardous substance, equipment, or other thing which
might cause injury to person or property or increase the danger of fire or other
casualty in, on or about the Premises; or permit any objectionable or offensive
noise or odors to be emitted from the Premises. Notwithstanding the foregoing,
Landlord acknowledges that Tenant will utilize certain distribution equipment
which, but for this sentence, might be deemed to violate this provision and use
of such equipment is expressly permitted.

                  C. Tenant shall not use the Premises, or allow the Premises to
be used, for any purpose or in any manner other than the permitted uses which
would, in Landlord's opinion, invalidate any policy of insurance now or
hereafter carried on the Premises or the Building or increase the rate of
premiums payable on any such insurance policy. Should Tenant fail to comply with
this covenant, Landlord may, at its option, require Tenant to stop engaging in
such activity or to reimburse Landlord as additional rent for any increase in
premiums charged during the Term of this Lease on the insurance carried by
Landlord on the Premises and the Building and attributable to the use being made
of the Premises by Tenant.

                  5.03 - ACCESS TO AND INSPECTION OF THE PREMISES. Landlord, its
employees and agents, shall have the right to enter any part of the Premises, at
all reasonable times after reasonable notice, for the purpose of examining or
inspecting the same, showing the same to prospective purchasers, mortgagees or
tenants, and for making such repairs, alterations or improvements to the
Premises and the Building as Landlord may deem necessary or desirable. Landlord
shall incur no liability to Tenant for such entry, except with respect to the
negligence or intentional, wrongful acts or omissions of Landlord, its agents,
employees and invitees, nor shall such entry constitute an eviction of Tenant or
a termination of this Lease, or entitle Tenant to any abatement of rent
therefor.

                  5.04 - COMPLIANCE WITH LAWS. Tenant shall comply with all
laws, statutes, ordinances, rules, regulations and orders of any federal, state,
municipal, or other government or agency thereof having jurisdiction over and
relating to the use and occupancy of the Premises, including any such laws,
statutes or regulations requiring modifications or alterations to the Premises.

                  5.05 - RULES AND REGULATIONS. The Building shall at all times
be subject to the management and control of the Landlord, and Landlord shall
have the right, from time to time, to establish, modify and enforce reasonable
rules and regulations with respect to the Building, and the use of the Building
by Tenant, its subtenants and their respective employees, agents, customers and
invitees shall be subject to such rules and regulations. Such rules and
regulations may include, but shall not be limited to restrictions upon Tenant's
hours of operation, noise levels with the Building, load placement and utility
usage.


                                      -9-



VI -- UTILITIES, EQUIPMENT MAINTENANCE AND OTHER SERVICES

                  6.01 - ELECTRIC, GAS AND WATER. Landlord, or Limited
Distribution Services, Inc. ("LDS"), acting as Landlord's agent, shall contract
with the appropriate public utilities companies or other providers supplying
electric, gas, water, sanitary sewer and all other utilities and services to the
Premises or to Tenant and shall pay directly all charges for such services from
and after the Commencement Date. Thereafter, Landlord or LDS shall reasonably
allocate these utility or service charges attributable to the Premises or to
Tenant and, on a periodic basis, provide to Tenant a written statement detailing
Tenant's allocation thereof. Tenant shall pay to Landlord or LDS, as
appropriate, within fifteen (15) days of Tenant's receipt of the written
statement therefor, all such utility and service charges.

                  6.02 - EQUIPMENT MAINTENANCE. LDS shall provide all
maintenance as is required to or deemed advisable for Tenant's distribution
center equipment located within the Premises. Tenant shall pay directly to LDS
all sums charged by LDS in connection with such equipment maintenance.

                  6.03 - JANITORIAL AND REFUSE COLLECTION SERVICE. Landlord
shall contract for janitorial and refuse collection services for the Premises
and shall pay for all charges for such services.


                                     -10-



                  6.04 - DISCONTINUANCES AND INTERRUPTIONS OF UTILITY SERVICES.
Neither Landlord nor LDS shall be liable to Tenant in damages or otherwise (i)
if any utilities shall become unavailable from any public utility company,
public authority, or any other person supplying or distributing such utility, or
(ii) for any interruption in any utility service (including, without limitation,
any heating, ventilation or air conditioning) caused by the making of any
necessary repairs or improvements or by any cause beyond Landlord's and LDS's
reasonable control, and the same shall not constitute a termination of this
Lease or an eviction of Tenant.

                  6.05 - CAFETERIA, MAIL ROOM AND RECEPTION SERVICES. Included
within the Premises are areas designated for use as the cafeteria and the mail
room. Excluded from the Premises, but comprising part of the Building Common
Areas, is the reception area (the cafeteria, mailroom and reception area being
referred to herein as the "Special Amenities"). Tenant shall maintain, staff and
operate the Special Amenities, including providing security services, for the
benefit of all tenants within the Building. Tenant will also control the Special
Amenities for purposes of decorating and equipping the areas in which each of
the Special Amenities is located. Tenant will charge directly the other tenants
within the Building for the use of the Special Amenities. Neither Landlord nor
LDS shall be liable to Tenant or any other tenant in the Building as a result of
Tenant's operation of the Special Amenities.


VII -- SIGNS

                  7.01 - SIGNS. Tenant shall not inscribe, paint, affix or
display any signs, advertisements or notices on the Premises, the Building, or
the Campus without Landlord's prior written consent, which consent Landlord
shall have no obligation to give and which may be given or withheld in
Landlord's sole discretion.


VIII -- REPAIRS, MAINTENANCE, ALTERATIONS, IMPROVEMENTS AND FIXTURES

                  8.01 - REPAIR AND MAINTENANCE OF BUILDING. Landlord shall keep
and maintain the Building (including all doors, whether interior or exterior,
any plate glass in the exterior walls and doors, the roof, exterior and interior
structural walls, and the foundation) and the electrical, plumbing, heating,
ventilation and air conditioning systems serving the Building in good order,
condition and repair, and shall make all necessary repairs to the Building and
the electrical, plumbing, heating, ventilation and air conditioning systems
serving the Building, and will make all replacements from time to time required
thereto.

                  8.02 - REPAIR AND MAINTENANCE OF PREMISES. Landlord shall
provide cleaning, janitorial, maintenance, repair and restoration services to
the Premises. If a repair is needed to so maintain the Building, then Tenant
shall give to Landlord verbal notice, and as soon thereafter as possible
confirming written notice, of such need for repair. Within a reasonable period
of time thereafter, Landlord shall examine the item or matter described in
Tenant's notice, and if


                                     -11-



Landlord should determine that such item or matter is in need of repair,
Landlord shall make such repair.

                  8.03 - ALTERATIONS OR IMPROVEMENTS. Tenant shall neither make,
nor permit to be made, any alterations or improvements to the Premises without
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld. If Landlord allow Tenant to make any such alterations or
improvements, Tenant shall make the same in accordance with all applicable laws
and building codes, in a good and workmanlike manner and in quality equal to or
better than the original construction of the Building, and shall comply with
such requirements as Landlord considers necessary or desirable, including,
without limitation, requirements as to the manner in which and the times at
which such work shall be done and the contractor or subcontractors to be
selected to perform such work. Tenant shall promptly pay all costs attributable
to such alterations and improvements and shall indemnify Landlord against any
mechanics' liens or other liens or claims filed or asserted as a result thereof
and against any costs or expenses which may be incurred as a result of building
code violations attributable to such work. Tenant shall promptly repair any
damage to the Premises and the Building caused by any such alterations or
improvements. Any alterations or improvements to the Premises, except movable
equipment and trade fixtures, shall become a part of the realty and the property
of Landlord, and shall not be removed by Tenant.

                  8.04 - TRADE FIXTURES. Any trade fixtures installed in the
Premises by Tenant at its own expense, such as movable partitions, counters,
shelving, and the like, may and, at the request of Landlord, shall be removed on
the Expiration Date or earlier termination of this Lease, provided that Tenant
is not then in default, that Tenant bears the cost of such removal, and further
that Tenant repairs, at its own expense, any and all damage to the Premises and
the Building resulting from such removal. If Tenant fails to remove any and all
such trade fixtures from the Premises on the Expiration Date or earlier
termination of this Lease, all such trade fixtures shall become the property of
Landlord, unless Landlord elects to require their removal, in which case Tenant
shall, at its cost, promptly remove same and restore the Premises to its prior
condition.


IX -- FIRE OR OTHER CASUALTY; CASUALTY INSURANCE

                  9.01 - DAMAGE OR DESTRUCTION BY CASUALTY. If the Building
should be substantially destroyed or damaged (which, as used herein, means
destruction or material damages to at least fifty percent (50%) of the Building)
by fire or other casualty, then either party hereto may, at its option,
terminate this Lease by giving written notice thereof to the other party within
thirty (30) calendar days after the date of such casualty. In such event, all
Rent due under this Lease shall be apportioned to and shall cease as of the date
of such casualty, and Tenant shall be given a reasonable period of time, not to
exceed forty-five (45) calendar days after receipt of written notice of
termination (or fourteen (14) days after giving notice of termination to
Landlord as appropriate) under this Section 9.01, in which to remove its trade
fixtures and personal property, whereupon both parties shall be released from
all further obligations and liability hereunder (except for any obligations
previously incurred hereunder). If neither party exercises this option,


                                     -12-



then the Building shall be reconstructed and restored at Landlord's expense,
to substantially the same condition as it was prior to the casualty;
provided, however, that, if Tenant has made any additional improvements
pursuant to Section 8.03, Tenant shall reimburse Landlord for the cost of
reconstructing the same. In the event of such reconstruction, all Rent due
under this Lease shall be abated from the date of the casualty until such
substantial completion of the reconstruction repairs; and this Lease shall
continue in full force and effect for the balance of the Term. Landlord shall
use reasonable diligence in completing such reconstruction repairs.
Notwithstanding the foregoing, if the Premises are substantially destroyed or
damaged (which, as used herein, means destruction or material damages to at
least fifty percent (50%) of the Premises, as applicable), then Tenant may,
at its option, terminate this Lease by giving written notice thereof to
Landlord within thirty (30) calendar days after the date of such casualty. In
such event, all Rent due under this Lease shall be apportioned to and shall
cease as of the date of such casualty, and Tenant shall be given a reasonable
period of time, not to exceed thirty-five (35) calendar days, in which to
remove its trade fixtures and personal property, whereupon both parties shall
be released from all further obligations and liabilities hereunder (except
for any obligations previously incurred hereunder).

                  9.02 - CASUALTY INSURANCE. Landlord shall obtain and pay for
insurance against fire and other casualty in respect of the Building. Landlord
shall not be responsible for, and shall not be obligated to insure against, any
loss of or damage to any personal property of Tenant or which Tenant may have in
the Premises, or any trade fixtures installed by or paid for by Tenant in the
Premises, or any additional improvements which Tenant may construct in the
Premises, as provided in Section 8.03.

                  9.03 - WAIVER OF SUBROGATION. Landlord and Tenant each hereby
waive any and all right that they may have to recover from the other damages for
any loss occurring to them by reason of any act or omission of the other, but
only to the extent that the waiving party is actually compensated therefor by
insurance; provided that this waiver shall be effective only with respect to
loss or damage occurring during such time as the waiving party's coverage under
the appropriate policy of insurance is not adversely affected by this waiver.
If, in order to avoid such adverse effect, an endorsement must be added to any
insurance policy required hereunder, Landlord and Tenant shall cause such
endorsement immediately to be added and thereafter maintained throughout the
Term of this Lease.


                                     -13-



X -- GENERAL PUBLIC LIABILITY, INDEMNIFICATION AND INSURANCE

                  10.01 - INDEMNIFICATION. Tenant shall indemnify Landlord and
hold it harmless from any and all liability for any loss, damage or injury to
person or property occurring in, on or about the Campus, the Building and the
Premises, regardless of cause, except for that caused by the negligence or
intentional wrongful acts of Landlord and its employees, agents, customers and
invitees; and Tenant hereby releases Landlord from any and all liability for the
same. Landlord shall indemnify Tenant and hold it harmless from any and all
liability for any loss, damage or injury to person or property resulting from
the gross negligence or intentional wrongful acts of Landlord and its employees,
agents, customers and invitees; and Landlord hereby releases Tenant from any and
all liability for the same. The obligation to indemnify hereunder shall include
the duty to defend against any claims asserted by reason of such loss, damage or
injury and to pay any judgments, settlements, costs, fees and expenses,
including attorneys' fees, incurred in connection therewith.

                  10.02 - TENANT'S INSURANCE. Tenant, shall, at all times during
the Term of this Lease, carry, at its own expense, policies of insurance, with
such coverages, in such amounts, and with such insurers as are reasonably
acceptable to Landlord, covering Tenant's property and fixtures located in the
Premises.


                                     -14-



XI -- EMINENT DOMAIN

                  11.01 - EMINENT DOMAIN. If the whole or any part of the
Building shall be taken for public or quasi-public use by a governmental or
other authority having the power of eminent domain, or shall be conveyed to such
authority in lieu of such taking, and if such taking or conveyance shall cause
the remaining part of the Building to be untenantable and inadequate for use by
Tenant for the purpose for which it was leased, then Tenant may, at its option,
terminate this Lease as of the date Landlord is required to surrender possession
of the Building. In such event, all Rent due under this Lease shall be
apportioned to and shall cease as of the date Landlord is required to surrender
possession of the Building, and Landlord and Tenant shall be released from all
further obligations and liability hereunder (except for any obligations
previously incurred hereunder). If a part of the Building shall be taken or
conveyed, but the remaining part is tenantable and adequate for Tenant's use,
Landlord shall make such repairs, alterations and improvements (exclusive of
repairs, alterations or improvements to tenant improvements, if any, installed
by Tenant pursuant to Section 8.03) as may be necessary to render the part not
taken or conveyed tenantable. If such taking or conveyance includes any part of
the Premises, the Rent shall be reduced in proportion to the part of the
Premises so taken or conveyed. All compensation awarded for such taking or
conveyance shall be the property of Landlord, without any deduction therefrom
for any present or future estate of Tenant, and Tenant hereby assigns to
Landlord all of its right, title and interest in and to any such award. However,
Tenant shall have the right to recover from such authority, but not from
Landlord, such compensation as may be awarded to Tenant on account of moving and
relocation expenses and depreciation to and removal of Tenant's trade fixtures
and personal property and alterations or tenant improvements, if any, installed
by Tenant pursuant to Section 8.03.


XII -- LIENS

                  12.01 - LIENS. If, because of any act or omission of Tenant or
anyone claiming by, through or under Tenant, any mechanic's lien or other lien
shall be filed against the Campus, the Building, the Premises or against other
property of Landlord (whether or not such lien is valid or enforceable as such),
Tenant shall, at its own expense, cause the same to be discharged or bonded of
record within a reasonable time, not to exceed thirty (30) calendar days after
the date Tenant becomes aware of the filing thereof, and shall also indemnify
Landlord and hold it harmless from any and all claims, losses, damages,
judgments, settlements, costs and expenses, including attorneys' fees, resulting
therefrom or by reason thereof.


                                     -15-



XIII -- ASSIGNMENT AND SUBLETTING

                  13.01 - ASSIGNMENT AND SUBLETTING. Tenant will not assign,
transfer, mortgage, or otherwise encumber this Lease or sublet or rent (or
permit occupancy or use of) the Premises, or any part thereof, without obtaining
the prior written consent of Landlord, which consent Landlord shall have no
obligation to give and which may be given or withheld in Landlord's sole
discretion.


XIV - TRANSFER BY LANDLORD

                  14.01 - ASSIGNMENT OF RIGHTS. Landlord shall have the right to
assign its rights under this Lease at any time during the Term of this Lease,
subject only to the rights of Tenant hereunder; and such assignment shall
operate to release Landlord from liability hereunder for all acts or omissions
occurring after the date of such assignment.

                  14.02 - SUBORDINATION. Unless a mortgagee shall otherwise
elect, as provided in Section 14.03, this Lease is and shall be subject and
subordinate to the lien of any and all mortgages (which term "mortgages" shall
include both construction and permanent financing and shall include deeds of
trust and similar security instruments) which may now or hereafter encumber or
otherwise affect this Lease, the Building, the Campus, or both, and to all and
any renewals, extensions, modifications, recastings or refinancings thereof. In
confirmation of such subordination, Tenant shall, at the request of Landlord,
promptly execute any requisite or appropriate certificate or other document.
Tenant agrees that in the event that any proceedings are brought for the
foreclosure of any such mortgage, Tenant shall attorn to the purchaser at such
foreclosure sale, if requested to do so by such purchaser, and to recognize such
purchaser as the landlord under this Lease, provided that such purchaser agrees
not to disturb Tenant's possession and other rights under this Lease so long as
Tenant is not in default hereunder, and Tenant waives the provisions of any
statute or rule of law, now or hereafter in effect, which may give or purport to
give Tenant any right to terminate or otherwise adversely affect this Lease and
the obligations of Tenant hereunder, in the event that any such foreclosure
proceeding is prosecuted or completed.

                  14.03 - MORTGAGEE'S UNILATERAL SUBORDINATION. If a mortgagee
shall so elect by notice to Tenant or by the recording of a unilateral
declaration of subordination, this Lease and Tenant's rights hereunder shall be
superior and prior in right to the mortgage of which such mortgagee has the
benefit, with the same force and effect as if this Lease had been executed,
delivered and recorded prior to the execution, delivery and recording of such
mortgage, subject, nevertheless, to such conditions as may be set forth in any
such notice of declaration which do not result in Tenant's occupancy under this
Lease being disturbed while Tenant is not in default hereunder.

                  14.04 - SUBORDINATION TO COVENANTS, CONDITIONS AND
RESTRICTIONS. Tenant agrees that this Lease shall be subordinate and subject to
any covenants, conditions, easements and restrictions ("CCR's") which Landlord,
in its sole discretion, has previously or hereafter grants or


                                     -16-



adopts with respect to or imposes upon the Campus, or any portion thereof, as
long as such CCR's do not substantially impair Tenant's use of the Premises
for the permitted uses hereunder. In confirmation of such subordination,
Tenant shall, at Landlord's request, promptly execute any requisite or
appropriate certificate or other document.

                  14.05 - EXCULPATION. If Landlord shall fail to perform any
covenant, term or condition of this Lease upon Landlord's part to be performed,
and if, as a consequence of such default, Tenant shall recover a money judgment
against Landlord, such judgment shall be satisfied only out of the proceeds of
sale received upon execution of such judgment and levied thereon against the
Landlord's interest in the Building and out of rents or other income from the
Building receivable by Landlord, or out of the consideration received by
Landlord from the sale or other disposition of all or any part of Landlord's
interest in the Building, subject, nevertheless, to the rights of any mortgagee,
and neither Landlord nor any of the shareholders, directors or officers of
Landlord shall be liable for any deficiency.


XV -- DEFAULTS AND REMEDIES

                  15.01 - DEFAULTS BY TENANT. The occurrence of any one or more
of the following events shall be a default and breach of this Lease by Tenant:

                  A. Tenant shall fail to pay any monthly installment of Rent
within five (5) calendar days after the same shall be due and payable, or any
other sum(s) within ten (10) calendar days after the same shall be due and
payable, and such nonpayment continues for a period of ten (10) days after
Landlord gives to Tenant written notice of such nonpayment.

                  B. Tenant shall fail to perform or observe any term,
condition, covenant or obligation required to be performed or observed by it
under this Lease for a period of thirty (30) calendar days or more after notice
thereof from Landlord; provided, however, that if the term, condition, covenant
or obligation to be performed by Tenant is of such nature that the same cannot
reasonably be performed within such thirty (30) day period, such default shall
be deemed to have been cured if Tenant commences such performance within said
thirty (30) day period and thereafter diligently completes the same.

                  C. A trustee or receiver shall be appointed to take possession
of substantially all of Tenant's assets in or about the Premises or of Tenant's
interest in this Lease (and Tenant does not regain possession within sixty (60)
calendar days after such appointment); Tenant makes an assignment for the
benefit of creditors; or substantially all of Tenant's assets in or about the
Premises or Tenant's interest in this Lease are attached or levied upon under
execution (and Tenant does not discharge the same within sixty (60) calendar
days thereafter).

                  D. A petition in bankruptcy, insolvency, or for reorganization
or arrangement is filed by or against Tenant pursuant to any federal or state
statute (and, with respect to any such petition filed against it, Tenant fails
to secure a stay or discharge thereof within sixty (60) calendar days after the
filing of the same).


                                      -17-



                  15.02 - REMEDIES OF LANDLORD - Upon the occurrence of any
event of default set forth in Section 15.01, Landlord shall have the following
rights and remedies, in addition to those allowed by law, any one or more of
which may be exercised without further notice to or demand upon Tenant:

                  E. Landlord may re-enter the Premises and cure any default of
Tenant, in which event Tenant shall reimburse Landlord as additional rent for
any costs and expenses which Landlord may incur to cure such default; and
Landlord shall not be liable to Tenant for any loss or damage which Tenant may
sustain by reason of Landlord's action, regardless of whether caused by
Landlord's negligence or otherwise.

                  F. Landlord may terminate this Lease as of the date of such
default, in which event: (1) neither Tenant nor any person claiming under or
through Tenant shall thereafter be entitled to possession of the Premises, and
Tenant shall immediately thereafter surrender the Premises to Landlord; (2)
Landlord may re-enter the Premises and dispossess Tenant or any other occupants
of the Premises by force, summary proceedings, ejectment or otherwise, and may
remove their effects, without prejudice to any other remedy which Landlord may
have for possession or arrearages in rent; and (3) notwithstanding the
termination of this Lease (a) Landlord may recover from Tenant, as general
damages, the maximum amount allowed by law, which, at a minimum, shall be the
present value of the balance of the Rent which would have been due and payable
for the balance of the Term of this Lease, less the present value of the fair
rental value of the Premises for such period (with said present values being
determined using an eight percent (8%) discount rate), whereupon Tenant shall be
obligated to pay the same to Landlord, together with all costs, losses and
damages which Landlord may sustain by reason of such termination and re-entry,
or (b) Landlord may relet all or any part of the Premises for a term different
from that which would otherwise have constituted the balance of the Term of this
Lease, and for rent and on terms and conditions different from those contained
herein, whereupon Tenant shall immediately be obligated to pay to Landlord, as
liquidated damages, the difference between the Rent provided for herein and that
provided for in any lease covering a subsequent reletting of the Premises, for
the period which would otherwise have constituted the balance of the Term of
this Lease, together with all of Landlord's costs and expenses for preparing the
Premises for reletting, including all repairs, brokers' and attorneys' fees, and
all costs, losses and damages which Landlord may sustain by reason of such
termination, re-entry and reletting, it being expressly understood and agreed
that the liabilities and remedies specified in clauses (a) and (b) hereof shall
survive the termination of this Lease. Notwithstanding the foregoing, Landlord
shall use all reasonable efforts to mitigate its damages.

                  G. Landlord may sue for injunctive relief or to recover
damages for any loss resulting from the breach.

                  15.03 - NON-WAIVER OF DEFAULTS. The failure or delay by
Landlord or Tenant to enforce or exercise, at any time, any of the rights or
remedies or other provisions of this Lease shall not be construed to be a waiver
thereof, nor affect the validity of any part of this Lease or the right of
Landlord or Tenant thereafter to enforce each and every such right or remedy or
other


                                      -18-




provision. No waiver of any default and breach of the Lease shall be held
to be a waiver of any other default and breach. The receipt by Landlord of less
than the full rent due shall not be construed to be other than a payment on
account of rent then due, nor shall any statement on Tenant's check or any
letter accompanying Tenant's check be deemed an accord and satisfaction, and
Landlord may accept such payment without prejudice to Landlord's right to
recover the balance of the rent due or to pursue any other remedies provided in
this Lease. No act or omission by Landlord or its employees or agents during the
Term of this Lease shall be deemed an acceptance or a surrender of the Premises,
and no agreement to accept such a surrender shall be valid unless in writing and
signed by Landlord.


XVI -- NOTICE AND PLACE OF PAYMENT

                  16.01 - NOTICE. Any notice or other communication required or
permitted to be given to a party under this Lease shall be in writing, unless
otherwise specified in this Lease, and shall be given by one of the following
methods to such party at the address set forth in Item H of the Basic Lease
Provisions: (1) it may be sent by registered or certified United States mail,
return receipt requested and postage prepaid, or (2) it may be sent by ordinary
United States mail or delivered in person or by courier, telecopier, telex,
telegram, interconnected computers, or any other means for transmitting a
written communication. Any such notice shall be deemed to have been given as
follows: (i) when sent by registered or certified United States mail, as of the
earlier of date of delivery shown on the receipt, or as of the second calendar
day after it was mailed, and (ii) when delivered by any other means, upon
receipt. Either party may change its address for notice by giving written notice
thereof to the other party.

                  16.02 - PLACE OF PAYMENT. All rent and other payments required
to be made by Tenant to Landlord shall be made by inter-company transfers or
shall be delivered or mailed to Landlord at the address specified in Item H of
the Basic Lease Provisions, or any other address Landlord may specify from time
to time by written notice given to Tenant.


XVII -- HAZARDOUS SUBSTANCES

                  17.01 - HAZARDOUS SUBSTANCES. Tenant shall not cause or permit
any Hazardous Substance (as hereinafter defined) to be used, stored, generated
or disposed of on or in the Premises, the Building or the Campus by Tenant,
Tenant's agents, employees, contractors, invitees or sublessees, without first
obtaining Landlord's written consent. If Hazardous Substances are used, stored,
generated or disposed of on or in the Premises, or if the Premises, the Building
or the Campus becomes contaminated in any manner for which Tenant is legally
liable, Tenant shall indemnify and hold harmless Landlord from any and all
claims, damages, fines, judgments, penalties, costs, liabilities or losses
(including, without limitation, a decrease in value of the Building or the
Campus, damages caused by loss or restriction of rentable or usable space, or
any damages caused by adverse impact on marketing of the space, and any and all
sums paid for settlement of claims, attorneys' fees, consultant and expert fees)
arising during or after the Term of the Lease, and arising as a result of that
contamination by Tenant. This


                                     -19-



indemnification includes, without limitation, any and all costs incurred
because of any investigation of the site or any cleanup, removal or
restoration mandated by a federal, state or local agency or political
subdivision. Without limitation of the foregoing, if Tenant causes or permits
the presence of any Hazardous Substance on or in the Premises, the Building
or the Campus and that results in contamination, Tenant shall promptly, at
its sole expense, take any and all necessary actions to return the Premises,
the Building and the Campus to the condition existing prior to the presence
of any such Hazardous Substance on or in the Premises. Tenant shall first
obtain Landlord's approval for any such remedial action. As used herein,
"Hazardous Substance" means any substance that is toxic, ignitable, reactive
or corrosive and that is regulated by any local government, the State of
Ohio, or the United States Government. "Hazardous Substance" includes any and
all materials or substances that are defined as "hazardous waste", "extremely
hazardous waste", or a "hazardous substance" pursuant to state, federal or
local government law. "Hazardous Substance" includes, but is not restricted
to, asbestos, polychlorinated biphenyls, petroleum, petroleum products, and
petroleum wastes.

XVIII -- MISCELLANEOUS GENERAL PROVISIONS

                  18.01 - RELOCATION; TERMINATION. Tenant acknowledges and
agrees that Landlord has the right and option to relocate Tenant to different
premises within the Building or to a different building within the Campus or to
a different building on another campus controlled by Landlord. Tenant agrees
that this Lease is, and Tenant's possession rights hereunder are, subject to
said relocation rights. In such event, Tenant agrees to relocate in accordance
with Landlord's plan of relocation and to cooperate fully with Landlord in
completing the relocation. In the event that Tenant should cease to be an entity
which is controlled by The Limited, Inc., then Landlord shall have the right and
option to terminate this Lease by giving Tenant written notice of such
termination at least one hundred eighty (180) days prior to the proposed
Effective Date of the termination. For the purposes of this section, a tenant is
"controlled by" The Limited, Inc. if The Limited, Inc., or one of its
subsidiaries, owns in excess of 50% of the voting shares of such tenant.

                  18.02 - DEFINITION OF RENT. Any amounts of money to be paid by
Tenant to Landlord pursuant to the provisions of this Lease, whether or not such
payments are denominated "Rent" and whether or not they are to be periodic or
recurring, shall be deemed "Rent" for purposes of this Lease; and any failure to
pay any of the same, as provided in Section 16.01 hereof, shall entitle Landlord
to exercise all of the rights and remedies afforded hereby or by law for the
collection and enforcement of Tenant's obligation to pay Rent. Tenant's
obligation to pay any such Rent, pursuant to the provisions of this Lease, shall
survive the expiration or other termination of this Lease and the surrender of
possession of the Premises after any hold over period.

                  18.03 - ESTOPPEL CERTIFICATE. Tenant agrees, at any time and
from time to time, upon not less than ten (10) calendar days prior written
notice by Landlord, to execute, acknowledge and deliver to Landlord, as
appropriate, a statement in writing (i) certifying that this Lease is unmodified
and in full force and effect, (or, if there have been modifications, stating


                                      -20-



such modifications); (ii) stating the dates to which the rent and any other
charges hereunder have been paid by Tenant;, (iii) stating whether or not, to
the best of Tenant's knowledge, Landlord is in default in the performance of any
covenant, agreement or condition contained in this Lease, and, if so, specifying
each such default of which Tenant may have knowledge; and (iv) stating the
address to which notices to Tenant should be sent. Any such statement delivered
pursuant hereto may be relied upon by any owner of the Building or the Campus,
any prospective purchaser of the Building, any mortgagee or prospective
mortgagee of the Building, or any prospective assignee of any such mortgagee.

                  18.04 - GOVERNING LAW. This Lease shall be construed and
enforced in accordance with the laws of the State of Ohio.

                  18.05 - SUCCESSORS AND ASSIGNS. This Lease and the respective
rights and obligations of the parties hereto shall inure to the benefit of and
be binding upon the successors and assigns of the parties hereto, as well as the
parties themselves; provided, however, that Landlord, its successors and
assigns, shall be obligated to perform Landlord's covenants under this Lease
only during and in respect to their successive periods of ownership during the
Term of this Lease.

                  18.06 - SEVERABILITY OF INVALID PROVISIONS. If any provision
of this Lease shall be held to be invalid, void or unenforceable, the remaining
provisions hereof shall not be affected or impaired, and such remaining
provisions shall remain in full force and effect.

                  18.07 - CERTAIN WORDS, GENDER AND HEADINGS. As used in this
Lease, the word "person" shall mean and include, where appropriate, an
individual, corporation, partnership or other entity; the plural shall be
substituted for the singular and the singular for the plural, where appropriate;
and words of any gender shall include any other gender. The topical headings of
the several paragraphs of this Lease are inserted only as a matter of
convenience and reference, and do not affect, define, limit or describe the
scope or intent of this Lease.

                  18.08 - QUIET ENJOYMENT. So long as Tenant pays the prescribed
rent and performs or observes all of the terms, conditions, covenants and
obligations of this Lease required to be performed or observed by it hereunder,
Tenant shall, at all times during the Term hereof, have the peaceable and quiet
enjoyment, possession, occupancy and use of the Premises, without any
interference from Landlord or any person or persons claiming the Premises, by,
through or under Landlord.

                  18.09 - COMPLETE AGREEMENT; AMENDMENTS. This Lease, including
all Exhibits, Riders and Addenda, constitutes the entire agreement between the
parties hereto; it supersedes all previous understandings and agreements between
the parties, if any, and no oral or implied representation or understandings
shall vary its terms; and it may not be amended, except by a written instrument
executed by both parties hereto.

                  18.10 - REASONABLE MODIFICATIONS. Tenant will consent to such
reasonable modifications of this Lease as Landlord may hereafter find it
necessary to make in order to obtain


                                     -21-




mortgage financing, provided that such modifications (a) do not change the
rental to be paid hereunder or the length of the Term of the Lease; and (b)
do not impose obligations upon Tenant which are substantially or practically
more burdensome to it than the obligations contained herein.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]










                                       -22-



                  IN WITNESS WHEREOF, the parties hereto have executed this
Lease as of the day and year first above written.

Witnesses as to Landlord:                   LANDLORD:

                                            DISTRIBUTION LAND CORP., a Delaware
                                            corporation


/s/ Pat Rockel                              By: /s/ George R. Sappenfield
- --------------                                 --------------------------
Print Name: Pat Rockel                      George R. Sappenfield
            ----------
/s/ Amy E. Dietz                            Vice President - Real Estate
- ----------------
Print Name: Amy E. Dietz
            ------------
                                            ATTESTED BY:

/s/ Pat Rockel                              /s/ C. David Zoba
- --------------                              -----------------
Print Name: Pat Rockel                      C. David Zoba
            ----------
                                            Vice President and Senior Counsel
/s/ Amy E. Dietz                              - Real Estate
- ----------------
Print Name: Amy E. Dietz
            ------------


Witnesses as to Tenant:                     TENANT:

                                            VICTORIA'S SECRET STORES, INC., a
                                            Delaware corporation


/s/ Pat Rockel                              By: /s/ George R. Sappenfield
- --------------                                 --------------------------
Print Name: Pat Rockel                      George R. Sappenfield
            ----------
/s/ Amy E. Dietz                            Vice President - Real Estate
- ----------------
Print Name: Amy E. Dietz
            ------------
                                            ATTESTED BY:

/s/ Pat Rockel                              /s/ C. David Zoba
- --------------                              -----------------
Print Name: Pat Rockel                      C. David Zoba
                                            Vice President and Senior Counsel
/s/ Amy E. Dietz                              - Real Estate
- ----------------
Print Name: Amy E. Dietz
            ------------


                                     -23-



STATE OF OHIO,
COUNTY OF FRANKLIN, SS:

         The foregoing instrument was acknowledged before me this 18th day of
March, 1999, by George R. Sappenfield and C. David Zoba, Vice President - Real
Estate and Vice President and Senior Counsel - Real Estate, respectively, of
Distribution Land Corp., a Delaware corporation, on behalf of the corporation.


                                                     /s/ Amy E. Dietz
                                                     ----------------
                                                     Notary Public






STATE OF OHIO,
COUNTY OF FRANKLIN, SS:

         The foregoing instrument was acknowledged before me this 18th day of
March, 1999, by George R. Sappenfield and C. David Zoba, Vice President - Real
Estate and Vice President and Senior Counsel - Real Estate, respectively, of
Victoria's Secret Stores, Inc., a Delaware corporation, on behalf of the
corporation.


                                                     /s/ Amy E. Dietz
                                                     ----------------
                                                     Notary Public


                                     -24-




                                    EXHIBIT A

     (Represents a map of the 321.1 acre site located in Reynoldsburg. Ohio)





                                    EXHIBIT B

  Premises Description - Victoria's Secret Stores, Inc. Distribution Center #4

     (Includes a map of the First and Second Floor of the Victoria's Secret
                      Stores, Inc. Distribution Center #4)
                                                          
- ------------------------------------------------------------ -----------------------------
Office Space:                                                137,276 square feet
- ------------------------------------------------------------ -----------------------------
Distribution Space:                                          515,972 square feet
- ------------------------------------------------------------ -----------------------------
Pro Rata Share of Building Common Area:                      9,279 square feet
- ------------------------------------------------------------ -----------------------------



- ------------------------------------------------------------------------------------------------------------------
                         Victoria's Secret Stores, Inc. Space in Distribution Center #4
- ------------------------------------------------------------------------------------------------------------------
                                         OFFICE                   DISTRIBUTION                   TOTAL
- ------------------------------ ---------------------------- -------------------------- ---------------------------
                                                                                 
         First Floor               28,660 square feet          391,484 square feet        420,144 square feet
- ------------------------------ ---------------------------- -------------------------- ---------------------------
        Second Floor               108,616 square feet         124,488 square feet        233,104 square feet
- ------------------------------ ---------------------------- -------------------------- ---------------------------

EX-10.8

                                                                   Exhibit 10.8

                                                         BATH & BODY WORKS, INC.



                                 LEASE AGREEMENT



                  This Lease Agreement (this "Lease") is entered into and made
as of the 31st day of January, 1999, by and between Distribution Land Corp., a
Delaware corporation (hereinafter referred to as "Landlord") and Bath & Body
Works, Inc., a Delaware corporation (hereinafter referred to as "Tenant").


                              W I T N E S S E T H:


                  WHEREAS, Landlord owns a certain office/warehouse distribution
facility containing approximately 699,552 square feet of floor space identified
on EXHIBIT A attached hereto and made a part hereof by this reference (the
"Building"); and

                  WHEREAS, the Building is located upon an approximately 321.1
acre parcel of land located at the intersection of East Broad Street (State
Route 16) and Taylor Road, Reynoldsburg, Ohio, which land is depicted on EXHIBIT
A attached hereto and made a part hereof by this reference (the "Campus"); and

                  WHEREAS, Landlord wishes to lease to Tenant a portion of the
Building as more particularly described in Section 1.02 below (the "Premises")
and to grant to Tenant the right to utilize certain common areas and facilities
located within the Building and the Campus, all subject to the terms and
conditions of this Lease; and

                  WHEREAS, Tenant wishes to lease, from Landlord, a portion of
the Building and to utilize those certain common areas and facilities located
within the Building and the Campus.

                  NOW, THEREFORE, in consideration of the premises described
above and the mutual promises set forth herein, Landlord and Tenant, intending
to be legally bound, hereby agree as follows:




I -- LEASE OF PREMISES

                  1.01 - LEASE OF PREMISES. Landlord, in consideration of the
rents and covenants hereinafter set forth, does hereby demise, let and lease to
Tenant, and Tenant does hereby hire, take and lease from Landlord, on the terms
and conditions hereinafter set forth, the Premises, to have and to hold the
same, with all appurtenances unto Tenant for the Term hereinafter specified.

                  1.02 - BASIC LEASE PROVISIONS.

                  A.       Building Address: 8525 East Broad Street
                                             Reynoldsburg, Ohio 43068

                  B.       Building Description: an office/warehouse
                           distribution facility, containing approximately
                           144,726 square feet of office space, 547,437 square
                           feet of distribution space and 7,389 square feet of
                           Building Common Area (as hereinafter defined)

                  C.       Premises Description: the floors of the Building on
                           which the Premises are located and the square footage
                           of the Premises are depicted on the floor plan
                           attached hereto as Exhibit B and made a part hereof
                           by this reference.

                  D.       Term: Fifteen (15) years, beginning on January 31,
                           1999 (the "Commencement Date") and ending on January
                           30, 2014 (the "Expiration Date")

                  E.       Annual Rent:

                           (i)      Office space and Pro Rata Share of Building
                                    Common Areas - $16.15 per square foot, or
                                    $2,177,391.50

                           (ii)     Distribution space - $4.35 per square foot,
                                    or $1,593,613.80

                           (iii)    Total Annual Rent of $3,771,005.30

                           (iv)     The Annual Rent shall be subject to periodic
                                    adjustments as provided in Section 4.02 of
                                    this Lease

                  F.       Monthly Installments of Rent:  $314,250.44

                  G.       Renewal Option(s): three (3) five (5) year Renewal
                           Option(s) - See Section 4.05 of this Lease for terms
                           of the Renewal Options


                                     -2-



                  H.       Addresses for Notices and Payments:

                           Tenant:          Bath & Body Works, Inc.
                                            8525 East Broad Street
                                            Reynoldsburg, Ohio 43068

                           with a copy to:

                                            Bath & Body Works, Inc.
                                            Three Limited Parkway
                                            Columbus, Ohio 43230
                                            Attention: Corporate Real Estate
                                                       Department

                           Landlord:        Distribution Land Corp.
                                            Three Limited Parkway
                                            Columbus, Ohio 43230

                           with a copy to:

                                            Distribution Land Corp.
                                            Three Limited Parkway
                                            Columbus, Ohio 43230
                                            Attention:  Corporate Real Estate
                                            Department

                  I.       Use: office/warehouse distribution use related to
                           distribution for retail sale of men's, women's and
                           children's apparel, accessories, personal care items
                           and other products, and for all administrative
                           activities relating thereto

                  1.03 - DESCRIPTION OF THE BUILDING, THE PREMISES AND THE
                  COMMON AREAS.

                  J. THE BUILDING. The Building is depicted on the attached
Exhibit A. The address and description of the Building are specified in Items A
and B of the Basic Lease Provisions (which are set forth in Section 1.02 of this
Lease).

                  K. THE PREMISES. The Premises consist of space which: (i) is
located on the floor or floors of the Building designated on the attached
EXHIBIT B, (ii) is located in one or more areas or parts of each such floor, and
(iii) is bound by the proposed or existing demising walls therefor, the
approximate locations of such demising walls and space being marked in color or
cross-hatched and shown on the diagram of the floor plan for each such floor,
such diagram being attached to this Lease as EXHIBIT B and made a part hereof by
this reference. The Premises also include that portion of the Building Common
Areas (as defined in Section 1.03(L) of this Lease) which has been allocated to
Tenant on the basis of the square footage of office space designated for
Tenant's use in items (i), (ii) and (iii) above divided by the total square
footage of office space located within the Building ("Pro Rata Share of Building
Common Areas"). The


                                     -3-


approximate number of square feet contained in the area which comprises the
Premises is also specified on EXHIBIT B.

                  L. COMMON AREAS. The Building is located within, and
constitutes a part of, the Campus. The Campus has been improved with the
Building, additional buildings and structures not subject to this Lease,
security buildings and facilities and roadways, driveways, walkways, parking
areas, loading areas, fences, walls, hedges, plantings, poles, ponds, lakes,
signs, utility improvements, trees, plantings and other landscaping features
(the Campus, excluding the Building, being referred to herein as the "Campus
Common Areas"). The Building contains certain areas or parts which are
designated for use in common by all of the tenants of the Building and their
respective employees, agents, customers, and invitees. Such areas include
entrances, exits and doors, lobbies, hallways, corridors and stairwells,
elevators and restrooms, but excluding certain "special amenities" such as the
cafeteria, mail room and reception area (all of which are referred to herein as
the "Building Common Areas"). The Campus Common Areas and the Building Common
Areas are sometimes referred to herein collectively as the "Common Areas".


II -- COMMON AREAS

                  2.01 - USE OF BUILDING COMMON AREAS. Subject to Landlord's
right at any time to use the Building Common Areas for its own purposes and the
right of any other tenant to operate the Building Common Areas, Landlord hereby
gives to Tenant and its employees, agents, customers and invitees, the
nonexclusive right to use the Building Common Areas in common with and subject
to the rights given to other tenants of the Building.

                  2.02 - USE OF CAMPUS COMMON AREAS. Subject to Landlord's right
at any time to use the Campus Common Areas for its own purposes, Landlord hereby
gives to Tenant and its employees, agents, customers and invitees, the
nonexclusive right to use the Campus Common Areas.

                  2.03 - RULES AND REGULATIONS FOR COMMON AREAS. The Campus
Common Areas and the Building Common Areas shall at all times be subject to the
exclusive management and control of Landlord which shall have the right, from
time to time, to establish, modify and enforce reasonable rules and regulations
with respect to all such Common Areas, and the use of such Campus Common Areas
and the Building Common Areas by Tenant, its subtenants and their respective
employees, agents, customers and invitees shall be subject to such rules and
regulations. Such rules and regulations may include, but shall not be limited
to, restrictions on parking, hours of operation, access routes, hours of access
to the Building and the Campus, rules with respect to the Building and such
other matters as may be deemed appropriate by Landlord from time to time.

                  2.04 - CHANGES IN COMMON AREAS. Landlord may do and perform
such acts in and to the Campus Common Areas and the Building Common Areas,
respectively, as it shall determine to be advisable. Landlord hereby reserves
the right to make reconfigurations,


                                     -4-


alterations, additions, deletions or changes to the Campus Common Areas and
Building Common Areas, respectively, including, but not limited to, changes
in the size and configuration of said Common Areas. Landlord reserves the
right to restrict and limit the use of the Campus Common Areas and Building
Common Areas, respectively, by Tenant, its subtenants and their respective
employees, agents, customers and invitees.

                  2.05 - MAINTENANCE OF COMMON AREAS. Subject to the provisions
of Section 4.03 hereof, Landlord shall adequately maintain the Campus Common
Areas and Building Common Areas, respectively, in a good and usable condition
throughout the Term of this Lease.

                  2.06 - COMMON AREA CAPITAL IMPROVEMENTS. Landlord may make
capital improvements to the Campus Common Areas and Building Common Areas,
respectively.


III -- TERM AND POSSESSION

                  3.01 - TERM. The Term of this Lease shall be for the period of
years and months specified in Item D of the Basic Lease Provisions; and shall
begin and end on the Commencement Date and Expiration Date, respectively,
specified in Item D of the Basic Lease Provisions, unless the Term of this Lease
is renewed, modified or terminated as provided elsewhere herein.

                  3.02 - TENANT'S ACCEPTANCE OF THE PREMISES. Tenant hereby
accepts the Premises in an "as is" condition and acknowledges that Landlord has
made no representations or warranties with respect thereto, and that Tenant has
inspected the Premises and found it to be in satisfactory condition.

                  3.03 - SURRENDER OF THE PREMISES. Upon the expiration or
earlier termination of this Lease, or upon the exercise by Landlord of its right
to re-enter the Premises without terminating this Lease, Tenant shall
immediately surrender the Premises to Landlord, together with all alterations,
improvements and other property as provided elsewhere herein, in broom-clean
condition and in good order, condition and repair, except for ordinary wear and
tear and damage which Tenant is not obligated to repair, failing which Landlord
may restore the Premises to such condition at Tenant's expense. Upon such
expiration or termination, Tenant may, provided Tenant is not in default and
unless prohibited from doing so by other provisions of this Lease, have the
right to remove its personal property and trade fixtures. Tenant shall promptly
repair any damage caused by any such removal, and shall restore the Premises to
the condition existing prior to the installation of the items so removed,
ordinary wear and tear and damage which Tenant is not obligated to repair
excepted. If Tenant fails to remove any and all such trade fixtures from the
Premises on the Expiration Date or earlier termination of this Lease, all such
trade fixtures shall become the Property of Landlord, unless Landlord elects to
require their removal, in which case Tenant shall, at its cost, promptly remove
the same and restore the Premises to its prior condition.


                                     -5-


                  3.04 - HOLDING OVER. In the event that Tenant shall not
immediately surrender the Premises on the Expiration Date of the Term hereof,
Tenant shall, by virtue of the provisions hereof, become a tenant by the month
at the monthly rent in effect during the last month of the Term of this Lease,
which monthly tenancy shall commence with the first day next after the
Expiration Date. Tenant, as a monthly tenant, shall be subject to all of the
terms, conditions, covenants and agreements of this Lease. Tenant shall give to
Landlord at least thirty (30) calendar days written notice of any intention to
quit the Premises, and Tenant shall be entitled to thirty (30) calendar days
written notice to quit the Premises, unless Tenant is in default hereunder, in
which event Tenant shall not be entitled to any notice to quit, the usual thirty
(30) calendar days notice to quit being hereby expressly waived. Notwithstanding
the foregoing provisions of this Section 3.04, in the event that Tenant shall
hold over after the expiration of the Term of this Lease, and if Landlord shall
desire to regain possession of the Premises promptly at the expiration of the
Term of this Lease, then, at any time prior to Landlord's acceptance of rent
from Tenant as a monthly tenant hereunder, Landlord, at its option, may
forthwith re-enter and take possession of the Premises without process, or by
any legal process in force.

                  3.05 - RENEWAL OPTIONS. So long as Tenant is not in default
under the terms of this Lease, Landlord does hereby grant to Tenant the right
and option to extend and renew the fifteen (15) year Term of this Lease (herein
called the "Initial Term") for three (3) additional period(s) of five (5) years
each (herein the "Renewal Term(s)"), beginning on the date immediately following
the Expiration Date of the Initial Term or the preceding Renewal Term, as
appropriate, upon the same terms, conditions, covenants and provisions as are
provided in this Lease (except the Rent, which will be subject to adjustment as
provided in Section 4.02 hereof). Unless in respect of each Renewal Term
Landlord or Tenant notifies the other party, at least one (1) year prior to the
expiration of the Initial Term or Renewal Term then in effect, of its intent not
to extend and renew the Term of this Lease, then the Tenant shall be deemed to
have exercised its Renewal Option in respect of that Renewal Term. If the
Renewal Option is exercised as provided herein, then this Lease shall be amended
to reflect the changes which will result from such extension of the Term of this
Lease, including the modification to all references in the Lease to the "Term"
thereof (as defined in Section 3.01) to include the Renewal Term as well as the
Initial Term.


IV -- RENT

                  4.01 - RENT.

                  MONTHLY RENT. Commencing on January 31, 1999, Tenant shall pay
to Landlord, as Rent for the Premises, the annual sum specified in Item E of the
Basic Lease Provisions, payable in equal consecutive monthly installments as
specified in Item F of the Basic Lease Provisions, in advance, on or before the
first day of each and every calendar month during the Term of this Lease;
provided, however, that if the Expiration Date shall be a day other than the
first day of a calendar month, the Rent installment for such last fractional
month shall be prorated on the basis of the number of days during the month this
Lease was in effect in relation to the total number of days in such month.


                                     -6-


                  4.02 - RENT ADJUSTMENT.

                  A. CPI ADJUSTMENTS DURING THE INITIAL TERM. Commencing on the
first (1st) anniversary of the Commencement Date and continuing on the same date
every year thereafter during the Initial Term, the Rent due and payable to
Landlord shall be adjusted for the next succeeding year. The adjusted Rent for
each year shall be equal to the Rent paid during the immediately preceding
twelve (12) month period (the "lease year") increased by a percentage equal to
the percentage increase in the CPI (as hereinafter defined) computed by
comparing the CPI figure for that month which is two (2) months prior to the
adjustment date (the "adjustment month") with the CPI figure for the month
occurring twelve (12) months prior to the adjustment month (the "base month").
For example, in computing the percentage increase for the lease year commencing
January 31, 2002, the percentage increase in the CPI would be determined by
comparing the CPI figure for November, 2001, the adjustment month, with the CPI
figure for November, 2000, the base month, and similar comparisons would be made
using the CPI figures for adjustment months and base months every year
thereafter. For the purposes hereof, "CPI" shall mean the Consumer Price Index,
published by the Bureau of Labor Statistics of the United States Department of
Labor, in the column for "all items" in the table titled "Consumer Price Index
for all Urban Consumers: U.S. City average, 1982-1984 = 100".

                  If the CPI at any time herein is no longer published or
issued, Landlord and Tenant shall agree on such other index as is then generally
recognized for determination of purchasing power in the United States.

                  B. ADJUSTMENTS DURING THE RENEWAL TERM. Commencing on the
first day of each Renewal Term the Rent shall be adjusted to an amount which, in
Landlord's reasonable judgment, is equal to the then current market rental rate
for similar buildings, in similar locations and in the same geographic area.
Provided, however, in no event shall the Rent for the Renewal Term be less than
the Rent which was paid by Tenant during the immediately preceding Term.
Commencing on the first anniversary of such date and continuing on the same date
every year thereafter during the Renewal Term, the Rent due and payable to
Landlord shall be adjusted for the next succeeding year. The adjusted Rent for
each year shall be equal to the Rent paid during the immediately preceding 12
month period (the "lease year") increased by a percentage equal to the
percentage increase in the CPI computed by comparing the CPI figure for that
month which is two months prior to the adjustment date (the "adjustment month")
with the CPI figure for the month occurring 12 months prior to the adjustment
month (the "base month"). For example, in computing the percentage increase for
the lease year commencing January 31, 2002, the percentage increase in the CPI
would be determined by comparing the CPI figure for November, 2001, the
adjustment month with the CPI figure for November, 2000, the base month, and
similar comparisons will be made using the CPI figures for adjustment months and
base months every year thereafter.

                  C. EXTRAORDINARY CAPITAL EXPENDITURES. If, during the Term of
this Lease, Landlord should agree to make any extraordinary Capital Improvements
to the Premises, such extraordinary Capital Improvements being the result of
either (i) Tenant's request, or


                                     -7-


(ii) Landlord's determination, in its sole discretion, that, due to Tenant's
activities upon the Premises such improvements are necessary, then Landlord
may either immediately charge Tenant for the costs of all such Capital
Improvements, which costs shall be paid by Tenant within 30 days of
Landlord's request therefor, or add to the Rent (to be paid in monthly
installments), an amount equal to the annual depreciation or amortization
with respect to the cost of such equipment or capital improvement, as
determined by Landlord in accordance with generally accepted accounting
principles, together with interest on such cost or the unamortized balance
thereof at the rate as may have to be paid by or accrued on the books of
Landlord on the unamortized balance.

                  D. EXTRAORDINARY SERVICES. If, during the Term of this Lease,
Landlord provides to Tenant services, including but not limited to repair,
maintenance and janitorial services, (i) in excess of those normally required to
maintain the Building in a manner consistent with similar buildings, in similar
locations in the same geographic areas, and (ii) such extraordinary services are
the result of or made necessary as a result of Tenant's activities within the
Premises, then Landlord shall have the right to calculate the cost of such
extraordinary services and to charge Tenant the cost thereof. All such charges
shall be calculated and charged to Tenant, on a monthly basis, to be paid by
Tenant as Rent hereunder.

                  4.03 - LATE PAYMENT SERVICE CHARGE; INTEREST. In the event any
installment of Rent, or any other amount which may become due under this Lease
is not paid when due, and such nonpayment continues for a period of ten (10)
days after Landlord gives to Tenant written notice of such nonpayment, then, for
each and every such payment, Tenant shall immediately pay a service charge equal
to five percent (5%) of the amount not timely paid, together with interest on
the amount not timely paid at the rate of eight percent (8%) per annum, from the
due date of such payment until paid. The provisions of this Section 4.03 shall
not be construed to extend the date for payment of Rent, or any other amount
which may become due under this Lease, or to relieve Tenant of its obligations
to pay all such items at the time or times herein stipulated, and neither demand
for, nor collection by Landlord of, late payment service charges and interest
pursuant to this Section 4.03 shall be construed as a cure of any default in
payment by Tenant.


V -- USE OF PREMISES

                  5.01 - SPECIFIC USE. The Premises shall be occupied and used
exclusively for the purposes specified in Item I of the Basic Lease Provisions
and for purposes incidental thereto, and shall not be used for any other
purposes.

                  5.02 - COVENANTS REGARDING USE. In connection with its use of
the Premises, Tenant agrees to do the following:

                  A. Tenant shall use the Premises and conduct its business
therein in a safe, careful, reputable and lawful manner; shall keep any garbage,
trash, rubbish or other refuse in sealed containers within the interior of the
Premises until removed and placed in a dumpster or


                                     -8-


other authorized container for the deposit of garbage and refuse, which shall
be located in an area designated by Landlord.

                  B. Tenant shall not commit, nor allow to be committed, in, on
or about the Premises any act of waste, including any act which might deface,
damage or destroy the Premises or any part thereof; use or permit to be used
within the Premises any hazardous substance, equipment, or other thing which
might cause injury to person or property or increase the danger of fire or other
casualty in, on or about the Premises; or permit any objectionable or offensive
noise or odors to be emitted from the Premises. Notwithstanding the foregoing,
Landlord acknowledges that Tenant will utilize certain distribution equipment
which, but for this sentence, might be deemed to violate this provision and use
of such equipment is expressly permitted.

                  C. Tenant shall not use the Premises, or allow the Premises to
be used, for any purpose or in any manner other than the permitted uses which
would, in Landlord's opinion, invalidate any policy of insurance now or
hereafter carried on the Premises or the Building or increase the rate of
premiums payable on any such insurance policy. Should Tenant fail to comply with
this covenant, Landlord may, at its option, require Tenant to stop engaging in
such activity or to reimburse Landlord as additional rent for any increase in
premiums charged during the Term of this Lease on the insurance carried by
Landlord on the Premises and the Building and attributable to the use being made
of the Premises by Tenant.

                  5.03 - ACCESS TO AND INSPECTION OF THE PREMISES. Landlord, its
employees and agents, shall have the right to enter any part of the Premises, at
all reasonable times after reasonable notice, for the purpose of examining or
inspecting the same, showing the same to prospective purchasers, mortgagees or
tenants, and for making such repairs, alterations or improvements to the
Premises and the Building as Landlord may deem necessary or desirable. Landlord
shall incur no liability to Tenant for such entry, except with respect to the
negligence or intentional, wrongful acts or omissions of Landlord, its agents,
employees and invitees, nor shall such entry constitute an eviction of Tenant or
a termination of this Lease, or entitle Tenant to any abatement of rent
therefor.

                  5.04 - COMPLIANCE WITH LAWS. Tenant shall comply with all
laws, statutes, ordinances, rules, regulations and orders of any federal, state,
municipal, or other government or agency thereof having jurisdiction over and
relating to the use and occupancy of the Premises, including any such laws,
statutes or regulations requiring modifications or alterations to the Premises.

                  5.05 - RULES AND REGULATIONS. The Building shall at all times
be subject to the management and control of the Landlord, and Landlord shall
have the right, from time to time, to establish, modify and enforce reasonable
rules and regulations with respect to the Building, and the use of the Building
by Tenant, its subtenants and their respective employees, agents, customers and
invitees shall be subject to such rules and regulations. Such rules and
regulations may include, but shall not be limited to restrictions upon Tenant's
hours of operation, noise levels with the Building, load placement and utility
usage.


                                     -9-


VI -- UTILITIES, EQUIPMENT MAINTENANCE AND OTHER SERVICES

                  6.01 - ELECTRIC, GAS AND WATER. Landlord, or Limited
Distribution Services, Inc. ("LDS"), acting as Landlord's agent, shall contract
with the appropriate public utilities companies or other providers supplying
electric, gas, water, sanitary sewer and all other utilities and services to the
Premises or to Tenant and shall pay directly all charges for such services from
and after the Commencement Date. Thereafter, Landlord or LDS shall reasonably
allocate these utility or service charges attributable to the Premises or to
Tenant and, on a periodic basis, provide to Tenant a written statement detailing
Tenant's allocation thereof. Tenant shall pay to Landlord or LDS, as
appropriate, within fifteen (15) days of Tenant's receipt of the written
statement therefor, all such utility and service charges.

                  6.02 - EQUIPMENT MAINTENANCE. LDS shall provide all
maintenance as is required to or deemed advisable for Tenant's distribution
center equipment located within the Premises. Tenant shall pay directly to LDS
all sums charged by LDS in connection with such equipment maintenance.

                  6.03 - JANITORIAL AND REFUSE COLLECTION SERVICE. Landlord
shall contract for janitorial and refuse collection services for the Premises
and shall pay for all charges for such services.


                                    -10-



                  6.04 - DISCONTINUANCES AND INTERRUPTIONS OF UTILITY SERVICES.
Neither Landlord nor LDS shall be liable to Tenant in damages or otherwise (i)
if any utilities shall become unavailable from any public utility company,
public authority, or any other person supplying or distributing such utility, or
(ii) for any interruption in any utility service (including, without limitation,
any heating, ventilation or air conditioning) caused by the making of any
necessary repairs or improvements or by any cause beyond Landlord's and LDS's
reasonable control, and the same shall not constitute a termination of this
Lease or an eviction of Tenant.

                  6.05 - CAFETERIA, MAIL ROOM AND RECEPTION SERVICES. Included
within the Premises are areas designated for use as the cafeteria and the mail
room. Excluded from the Premises, but comprising part of the Building Common
Areas, is the reception area (the cafeteria, mailroom and reception area being
referred to herein as the "Special Amenities"). Tenant shall maintain, staff and
operate the Special Amenities, including providing security services, for the
benefit of all tenants within the Building. Tenant will also control the Special
Amenities for purposes of decorating and equipping the areas in which each of
the Special Amenities is located. Tenant will charge directly the other tenants
within the Building for the use of the Special Amenities. Neither Landlord nor
LDS shall be liable to Tenant or any other tenant in the Building as a result of
Tenant's operation of the Special Amenities.


VII -- SIGNS

                  7.01 - SIGNS. Tenant shall not inscribe, paint, affix or
display any signs, advertisements or notices on the Premises, the Building, or
the Campus without Landlord's prior written consent, which consent Landlord
shall have no obligation to give and which may be given or withheld in
Landlord's sole discretion.


VIII -- REPAIRS, MAINTENANCE, ALTERATIONS, IMPROVEMENTS AND FIXTURES

                  8.01 - REPAIR AND MAINTENANCE OF BUILDING. Landlord shall keep
and maintain the Building (including all doors, whether interior or exterior,
any plate glass in the exterior walls and doors, the roof, exterior and interior
structural walls, and the foundation) and the electrical, plumbing, heating,
ventilation and air conditioning systems serving the Building in good order,
condition and repair, and shall make all necessary repairs to the Building and
the electrical, plumbing, heating, ventilation and air conditioning systems
serving the Building, and will make all replacements from time to time required
thereto.

                  8.02 - REPAIR AND MAINTENANCE OF PREMISES. Landlord shall
provide cleaning, janitorial, maintenance, repair and restoration services to
the Premises. If a repair is needed to so maintain the Building, then Tenant
shall give to Landlord verbal notice, and as soon thereafter as possible
confirming written notice, of such need for repair. Within a reasonable period
of time thereafter, Landlord shall examine the item or matter described in
Tenant's notice, and if


                                    -11-


Landlord should determine that such item or matter is in need of repair,
Landlord shall make such repair.

                  8.03 - ALTERATIONS OR IMPROVEMENTS. Tenant shall neither make,
nor permit to be made, any alterations or improvements to the Premises without
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld. If Landlord allow Tenant to make any such alterations or
improvements, Tenant shall make the same in accordance with all applicable laws
and building codes, in a good and workmanlike manner and in quality equal to or
better than the original construction of the Building, and shall comply with
such requirements as Landlord considers necessary or desirable, including,
without limitation, requirements as to the manner in which and the times at
which such work shall be done and the contractor or subcontractors to be
selected to perform such work. Tenant shall promptly pay all costs attributable
to such alterations and improvements and shall indemnify Landlord against any
mechanics' liens or other liens or claims filed or asserted as a result thereof
and against any costs or expenses which may be incurred as a result of building
code violations attributable to such work. Tenant shall promptly repair any
damage to the Premises and the Building caused by any such alterations or
improvements. Any alterations or improvements to the Premises, except movable
equipment and trade fixtures, shall become a part of the realty and the property
of Landlord, and shall not be removed by Tenant.

                  8.04 - TRADE FIXTURES. Any trade fixtures installed in the
Premises by Tenant at its own expense, such as movable partitions, counters,
shelving, and the like, may and, at the request of Landlord, shall be removed on
the Expiration Date or earlier termination of this Lease, provided that Tenant
is not then in default, that Tenant bears the cost of such removal, and further
that Tenant repairs, at its own expense, any and all damage to the Premises and
the Building resulting from such removal. If Tenant fails to remove any and all
such trade fixtures from the Premises on the Expiration Date or earlier
termination of this Lease, all such trade fixtures shall become the property of
Landlord, unless Landlord elects to require their removal, in which case Tenant
shall, at its cost, promptly remove same and restore the Premises to its prior
condition.


IX -- FIRE OR OTHER CASUALTY; CASUALTY INSURANCE

                  9.01 - DAMAGE OR DESTRUCTION BY CASUALTY. If the Building
should be substantially destroyed or damaged (which, as used herein, means
destruction or material damages to at least fifty percent (50%) of the Building)
by fire or other casualty, then either party hereto may, at its option,
terminate this Lease by giving written notice thereof to the other party within
thirty (30) calendar days after the date of such casualty. In such event, all
Rent due under this Lease shall be apportioned to and shall cease as of the date
of such casualty, and Tenant shall be given a reasonable period of time, not to
exceed forty-five (45) calendar days after receipt of written notice of
termination (or fourteen (14) days after giving notice of termination to
Landlord as appropriate) under this Section 9.01, in which to remove its trade
fixtures and personal property, whereupon both parties shall be released from
all further obligations and liability hereunder (except for any obligations
previously incurred hereunder). If neither party exercises this option,


                                    -12-


then the Building shall be reconstructed and restored at Landlord's expense,
to substantially the same condition as it was prior to the casualty;
provided, however, that, if Tenant has made any additional improvements
pursuant to Section 8.03, Tenant shall reimburse Landlord for the cost of
reconstructing the same. In the event of such reconstruction, all Rent due
under this Lease shall be abated from the date of the casualty until such
substantial completion of the reconstruction repairs; and this Lease shall
continue in full force and effect for the balance of the Term. Landlord shall
use reasonable diligence in completing such reconstruction repairs.
Notwithstanding the foregoing, if the Premises are substantially destroyed or
damaged (which, as used herein, means destruction or material damages to at
least fifty percent (50%) of the Premises, as applicable), then Tenant may,
at its option, terminate this Lease by giving written notice thereof to
Landlord within thirty (30) calendar days after the date of such casualty. In
such event, all Rent due under this Lease shall be apportioned to and shall
cease as of the date of such casualty, and Tenant shall be given a reasonable
period of time, not to exceed thirty-five (35) calendar days, in which to
remove its trade fixtures and personal property, whereupon both parties shall
be released from all further obligations and liabilities hereunder (except
for any obligations previously incurred hereunder).

                  9.02 - CASUALTY INSURANCE. Landlord shall obtain and pay for
insurance against fire and other casualty in respect of the Building. Landlord
shall not be responsible for, and shall not be obligated to insure against, any
loss of or damage to any personal property of Tenant or which Tenant may have in
the Premises, or any trade fixtures installed by or paid for by Tenant in the
Premises, or any additional improvements which Tenant may construct in the
Premises, as provided in Section 8.03.

                  9.03 - WAIVER OF SUBROGATION. Landlord and Tenant each hereby
waive any and all right that they may have to recover from the other damages for
any loss occurring to them by reason of any act or omission of the other, but
only to the extent that the waiving party is actually compensated therefor by
insurance; provided that this waiver shall be effective only with respect to
loss or damage occurring during such time as the waiving party's coverage under
the appropriate policy of insurance is not adversely affected by this waiver.
If, in order to avoid such adverse effect, an endorsement must be added to any
insurance policy required hereunder, Landlord and Tenant shall cause such
endorsement immediately to be added and thereafter maintained throughout the
Term of this Lease.


X -- GENERAL PUBLIC LIABILITY, INDEMNIFICATION AND INSURANCE

                  10.01 - INDEMNIFICATION. Tenant shall indemnify Landlord and
hold it harmless from any and all liability for any loss, damage or injury to
person or property occurring in, on or about the Campus, the Building and the
Premises, regardless of cause, except for that caused by the negligence or
intentional wrongful acts of Landlord and its employees, agents, customers and
invitees; and Tenant hereby releases Landlord from any and all liability for the
same. Landlord shall indemnify Tenant and hold it harmless from any and all
liability for any loss, damage or injury to person or property resulting from
the gross negligence or intentional wrongful acts of Landlord and its employees,
agents, customers and invitees; and Landlord hereby releases Tenant


                                    -13-


from any and all liability for the same. The obligation to indemnify
hereunder shall include the duty to defend against any claims asserted by
reason of such loss, damage or injury and to pay any judgments, settlements,
costs, fees and expenses, including attorneys' fees, incurred in connection
therewith.

                  10.02 - TENANT'S INSURANCE. Tenant, shall, at all times during
the Term of this Lease, carry, at its own expense, policies of insurance, with
such coverages, in such amounts, and with such insurers as are reasonably
acceptable to Landlord, covering Tenant's property and fixtures located in the
Premises.


XI -- EMINENT DOMAIN

                  11.01 - EMINENT DOMAIN. If the whole or any part of the
Building shall be taken for public or quasi-public use by a governmental or
other authority having the power of eminent domain, or shall be conveyed to such
authority in lieu of such taking, and if such taking or conveyance shall cause
the remaining part of the Building to be untenantable and inadequate for use by
Tenant for the purpose for which it was leased, then Tenant may, at its option,
terminate this Lease as of the date Landlord is required to surrender possession
of the Building. In such event, all Rent due under this Lease shall be
apportioned to and shall cease as of the date Landlord is required to surrender
possession of the Building, and Landlord and Tenant shall be released from all
further obligations and liability hereunder (except for any obligations
previously incurred hereunder). If a part of the Building shall be taken or
conveyed, but the remaining part is tenantable and adequate for Tenant's use,
Landlord shall make such repairs, alterations and improvements (exclusive of
repairs, alterations or improvements to tenant improvements, if any, installed
by Tenant pursuant to Section 8.03) as may be necessary to render the part not
taken or conveyed tenantable. If such taking or conveyance includes any part of
the Premises, the Rent shall be reduced in proportion to the part of the
Premises so taken or conveyed. All compensation awarded for such taking or
conveyance shall be the property of Landlord, without any deduction therefrom
for any present or future estate of Tenant, and Tenant hereby assigns to
Landlord all of its right, title and interest in and to any such award. However,
Tenant shall have the right to recover from such authority, but not from
Landlord, such compensation as may be awarded to Tenant on account of moving and
relocation expenses and depreciation to and removal of Tenant's trade fixtures
and personal property and alterations or tenant improvements, if any, installed
by Tenant pursuant to Section 8.03.


XII -- LIENS

                  12.01 - LIENS. If, because of any act or omission of Tenant or
anyone claiming by, through or under Tenant, any mechanic's lien or other lien
shall be filed against the Campus, the Building, the Premises or against other
property of Landlord (whether or not such lien is valid or enforceable as such),
Tenant shall, at its own expense, cause the same to be discharged or bonded of
record within a reasonable time, not to exceed thirty (30) calendar days after
the date Tenant becomes aware of the filing thereof, and shall also indemnify
Landlord and hold it harmless from


                                    -14-


any and all claims, losses, damages, judgments, settlements, costs and
expenses, including attorneys' fees, resulting therefrom or by reason thereof.

XIII -- ASSIGNMENT AND SUBLETTING

                  13.01 - ASSIGNMENT AND SUBLETTING. Tenant will not assign,
transfer, mortgage, or otherwise encumber this Lease or sublet or rent (or
permit occupancy or use of) the Premises, or any part thereof, without obtaining
the prior written consent of Landlord, which consent Landlord shall have no
obligation to give and which may be given or withheld in Landlord's sole
discretion.


XIV - TRANSFER BY LANDLORD

                  14.01 - ASSIGNMENT OF RIGHTS. Landlord shall have the right to
assign its rights under this Lease at any time during the Term of this Lease,
subject only to the rights of Tenant hereunder; and such assignment shall
operate to release Landlord from liability hereunder for all acts or omissions
occurring after the date of such assignment.

                  14.02 - SUBORDINATION. Unless a mortgagee shall otherwise
elect, as provided in Section 14.03, this Lease is and shall be subject and
subordinate to the lien of any and all mortgages (which term "mortgages" shall
include both construction and permanent financing and shall include deeds of
trust and similar security instruments) which may now or hereafter encumber or
otherwise affect this Lease, the Building, the Campus, or both, and to all and
any renewals, extensions, modifications, recastings or refinancings thereof. In
confirmation of such subordination, Tenant shall, at the request of Landlord,
promptly execute any requisite or appropriate certificate or other document.
Tenant agrees that in the event that any proceedings are brought for the
foreclosure of any such mortgage, Tenant shall attorn to the purchaser at such
foreclosure sale, if requested to do so by such purchaser, and to recognize such
purchaser as the landlord under this Lease, provided that such purchaser agrees
not to disturb Tenant's possession and other rights under this Lease so long as
Tenant is not in default hereunder, and Tenant waives the provisions of any
statute or rule of law, now or hereafter in effect, which may give or purport to
give Tenant any right to terminate or otherwise adversely affect this Lease and
the obligations of Tenant hereunder, in the event that any such foreclosure
proceeding is prosecuted or completed.

                  14.03 - MORTGAGEE'S UNILATERAL SUBORDINATION. If a mortgagee
shall so elect by notice to Tenant or by the recording of a unilateral
declaration of subordination, this Lease and Tenant's rights hereunder shall be
superior and prior in right to the mortgage of which such mortgagee has the
benefit, with the same force and effect as if this Lease had been executed,
delivered and recorded prior to the execution, delivery and recording of such
mortgage, subject, nevertheless, to such conditions as may be set forth in any
such notice of declaration which do not result in Tenant's occupancy under this
Lease being disturbed while Tenant is not in default hereunder.


                                    -15-


                  14.04 - SUBORDINATION TO COVENANTS, CONDITIONS AND
RESTRICTIONS. Tenant agrees that this Lease shall be subordinate and subject to
any covenants, conditions, easements and restrictions ("CCR's") which Landlord,
in its sole discretion, has previously or hereafter grants or adopts with
respect to or imposes upon the Campus, or any portion thereof, as long as such
CCR's do not substantially impair Tenant's use of the Premises for the permitted
uses hereunder. In confirmation of such subordination, Tenant shall, at
Landlord's request, promptly execute any requisite or appropriate certificate or
other document.

                  14.05 - EXCULPATION. If Landlord shall fail to perform any
covenant, term or condition of this Lease upon Landlord's part to be performed,
and if, as a consequence of such default, Tenant shall recover a money judgment
against Landlord, such judgment shall be satisfied only out of the proceeds of
sale received upon execution of such judgment and levied thereon against the
Landlord's interest in the Building and out of rents or other income from the
Building receivable by Landlord, or out of the consideration received by
Landlord from the sale or other disposition of all or any part of Landlord's
interest in the Building, subject, nevertheless, to the rights of any mortgagee,
and neither Landlord nor any of the shareholders, directors or officers of
Landlord shall be liable for any deficiency.


XV -- DEFAULTS AND REMEDIES

                  15.01 - DEFAULTS BY TENANT. The occurrence of any one or more
of the following events shall be a default and breach of this Lease by Tenant:

                  A. Tenant shall fail to pay any monthly installment of Rent
within five (5) calendar days after the same shall be due and payable, or any
other sum(s) within ten (10) calendar days after the same shall be due and
payable, and such nonpayment continues for a period of ten (10) days after
Landlord gives to Tenant written notice of such nonpayment.

                  B. Tenant shall fail to perform or observe any term,
condition, covenant or obligation required to be performed or observed by it
under this Lease for a period of thirty (30) calendar days or more after notice
thereof from Landlord; provided, however, that if the term, condition, covenant
or obligation to be performed by Tenant is of such nature that the same cannot
reasonably be performed within such thirty (30) day period, such default shall
be deemed to have been cured if Tenant commences such performance within said
thirty (30) day period and thereafter diligently completes the same.

                  C. A trustee or receiver shall be appointed to take possession
of substantially all of Tenant's assets in or about the Premises or of Tenant's
interest in this Lease (and Tenant does not regain possession within sixty (60)
calendar days after such appointment); Tenant makes an assignment for the
benefit of creditors; or substantially all of Tenant's assets in or about the
Premises or Tenant's interest in this Lease are attached or levied upon under
execution (and Tenant does not discharge the same within sixty (60) calendar
days thereafter).


                                    -16-


                  D. A petition in bankruptcy, insolvency, or for reorganization
or arrangement is filed by or against Tenant pursuant to any federal or state
statute (and, with respect to any such petition filed against it, Tenant fails
to secure a stay or discharge thereof within sixty (60) calendar days after the
filing of the same).

                  15.02 - REMEDIES OF LANDLORD - Upon the occurrence of any
event of default set forth in Section 15.01, Landlord shall have the following
rights and remedies, in addition to those allowed by law, any one or more of
which may be exercised without further notice to or demand upon Tenant:

                  E. Landlord may re-enter the Premises and cure any default of
Tenant, in which event Tenant shall reimburse Landlord as additional rent for
any costs and expenses which Landlord may incur to cure such default; and
Landlord shall not be liable to Tenant for any loss or damage which Tenant may
sustain by reason of Landlord's action, regardless of whether caused by
Landlord's negligence or otherwise.

                  F. Landlord may terminate this Lease as of the date of such
default, in which event: (1) neither Tenant nor any person claiming under or
through Tenant shall thereafter be entitled to possession of the Premises, and
Tenant shall immediately thereafter surrender the Premises to Landlord; (2)
Landlord may re-enter the Premises and dispossess Tenant or any other occupants
of the Premises by force, summary proceedings, ejectment or otherwise, and may
remove their effects, without prejudice to any other remedy which Landlord may
have for possession or arrearages in rent; and (3) notwithstanding the
termination of this Lease (a) Landlord may recover from Tenant, as general
damages, the maximum amount allowed by law, which, at a minimum, shall be the
present value of the balance of the Rent which would have been due and payable
for the balance of the Term of this Lease, less the present value of the fair
rental value of the Premises for such period (with said present values being
determined using an eight percent (8%) discount rate), whereupon Tenant shall be
obligated to pay the same to Landlord, together with all costs, losses and
damages which Landlord may sustain by reason of such termination and re-entry,
or (b) Landlord may relet all or any part of the Premises for a term different
from that which would otherwise have constituted the balance of the Term of this
Lease, and for rent and on terms and conditions different from those contained
herein, whereupon Tenant shall immediately be obligated to pay to Landlord, as
liquidated damages, the difference between the Rent provided for herein and that
provided for in any lease covering a subsequent reletting of the Premises, for
the period which would otherwise have constituted the balance of the Term of
this Lease, together with all of Landlord's costs and expenses for preparing the
Premises for reletting, including all repairs, brokers' and attorneys' fees, and
all costs, losses and damages which Landlord may sustain by reason of such
termination, re-entry and reletting, it being expressly understood and agreed
that the liabilities and remedies specified in clauses (a) and (b) hereof shall
survive the termination of this Lease. Notwithstanding the foregoing, Landlord
shall use all reasonable efforts to mitigate its damages.

                  G. Landlord may sue for injunctive relief or to recover
damages for any loss resulting from the breach.


                                     -17-


                  15.03 - NON-WAIVER OF DEFAULTS. The failure or delay by
Landlord or Tenant to enforce or exercise, at any time, any of the rights or
remedies or other provisions of this Lease shall not be construed to be a waiver
thereof, nor affect the validity of any part of this Lease or the right of
Landlord or Tenant thereafter to enforce each and every such right or remedy or
other provision. No waiver of any default and breach of the Lease shall be held
to be a waiver of any other default and breach. The receipt by Landlord of less
than the full rent due shall not be construed to be other than a payment on
account of rent then due, nor shall any statement on Tenant's check or any
letter accompanying Tenant's check be deemed an accord and satisfaction, and
Landlord may accept such payment without prejudice to Landlord's right to
recover the balance of the rent due or to pursue any other remedies provided in
this Lease. No act or omission by Landlord or its employees or agents during the
Term of this Lease shall be deemed an acceptance or a surrender of the Premises,
and no agreement to accept such a surrender shall be valid unless in writing and
signed by Landlord.


XVI -- NOTICE AND PLACE OF PAYMENT

                  16.01 - NOTICE. Any notice or other communication required or
permitted to be given to a party under this Lease shall be in writing, unless
otherwise specified in this Lease, and shall be given by one of the following
methods to such party at the address set forth in Item H of the Basic Lease
Provisions: (1) it may be sent by registered or certified United States mail,
return receipt requested and postage prepaid, or (2) it may be sent by ordinary
United States mail or delivered in person or by courier, telecopier, telex,
telegram, interconnected computers, or any other means for transmitting a
written communication. Any such notice shall be deemed to have been given as
follows: (i) when sent by registered or certified United States mail, as of the
earlier of date of delivery shown on the receipt, or as of the second calendar
day after it was mailed, and (ii) when delivered by any other means, upon
receipt. Either party may change its address for notice by giving written notice
thereof to the other party.

                  16.02 - PLACE OF PAYMENT. All rent and other payments required
to be made by Tenant to Landlord shall be made by inter-company transfers or
shall be delivered or mailed to Landlord at the address specified in Item H of
the Basic Lease Provisions, or any other address Landlord may specify from time
to time by written notice given to Tenant.


XVII -- HAZARDOUS SUBSTANCES

                  17.01 - HAZARDOUS SUBSTANCES. Tenant shall not cause or permit
any Hazardous Substance (as hereinafter defined) to be used, stored, generated
or disposed of on or in the Premises, the Building or the Campus by Tenant,
Tenant's agents, employees, contractors, invitees or sublessees, without first
obtaining Landlord's written consent. If Hazardous Substances are used, stored,
generated or disposed of on or in the Premises, or if the Premises, the Building
or the Campus becomes contaminated in any manner for which Tenant is legally
liable, Tenant shall indemnify and hold harmless Landlord from any and all
claims, damages, fines, judgments, penalties, costs, liabilities or losses
(including, without limitation, a decrease in


                                    -18-


value of the Building or the Campus, damages caused by loss or restriction of
rentable or usable space, or any damages caused by adverse impact on
marketing of the space, and any and all sums paid for settlement of claims,
attorneys' fees, consultant and expert fees) arising during or after the Term
of the Lease, and arising as a result of that contamination by Tenant. This
indemnification includes, without limitation, any and all costs incurred
because of any investigation of the site or any cleanup, removal or
restoration mandated by a federal, state or local agency or political
subdivision. Without limitation of the foregoing, if Tenant causes or permits
the presence of any Hazardous Substance on or in the Premises, the Building
or the Campus and that results in contamination, Tenant shall promptly, at
its sole expense, take any and all necessary actions to return the Premises,
the Building and the Campus to the condition existing prior to the presence
of any such Hazardous Substance on or in the Premises. Tenant shall first
obtain Landlord's approval for any such remedial action. As used herein,
"Hazardous Substance" means any substance that is toxic, ignitable, reactive
or corrosive and that is regulated by any local government, the State of
Ohio, or the United States Government. "Hazardous Substance" includes any and
all materials or substances that are defined as "hazardous waste", "extremely
hazardous waste", or a "hazardous substance" pursuant to state, federal or
local government law. "Hazardous Substance" includes, but is not restricted
to, asbestos, polychlorinated biphenyls, petroleum, petroleum products, and
petroleum wastes.

XVIII -- MISCELLANEOUS GENERAL PROVISIONS

                  18.01 - RELOCATION; TERMINATION. Tenant acknowledges and
agrees that Landlord has the right and option to relocate Tenant to different
premises within the Building or to a different building within the Campus or to
a different building on another campus controlled by Landlord. Tenant agrees
that this Lease is, and Tenant's possession rights hereunder are, subject to
said relocation rights. In such event, Tenant agrees to relocate in accordance
with Landlord's plan of relocation and to cooperate fully with Landlord in
completing the relocation. In the event that Tenant should cease to be an entity
which is controlled by The Limited, Inc., then Landlord shall have the right and
option to terminate this Lease by giving Tenant written notice of such
termination at least one hundred eighty (180) days prior to the proposed
Effective Date of the termination. For the purposes of this section, a tenant is
"controlled by" The Limited, Inc. if The Limited, Inc., or one of its
subsidiaries, owns in excess of 50% of the voting shares of such tenant.

                  18.02 - DEFINITION OF RENT. Any amounts of money to be paid by
Tenant to Landlord pursuant to the provisions of this Lease, whether or not such
payments are denominated "Rent" and whether or not they are to be periodic or
recurring, shall be deemed "Rent" for purposes of this Lease; and any failure to
pay any of the same, as provided in Section 16.01 hereof, shall entitle Landlord
to exercise all of the rights and remedies afforded hereby or by law for the
collection and enforcement of Tenant's obligation to pay Rent. Tenant's
obligation to pay any such Rent, pursuant to the provisions of this Lease, shall
survive the expiration or other termination of this Lease and the surrender of
possession of the Premises after any hold over period.


                                    -19-


                  18.03 - ESTOPPEL CERTIFICATE. Tenant agrees, at any time and
from time to time, upon not less than ten (10) calendar days prior written
notice by Landlord, to execute, acknowledge and deliver to Landlord, as
appropriate, a statement in writing (i) certifying that this Lease is unmodified
and in full force and effect, (or, if there have been modifications, stating
such modifications); (ii) stating the dates to which the rent and any other
charges hereunder have been paid by Tenant;, (iii) stating whether or not, to
the best of Tenant's knowledge, Landlord is in default in the performance of any
covenant, agreement or condition contained in this Lease, and, if so, specifying
each such default of which Tenant may have knowledge; and (iv) stating the
address to which notices to Tenant should be sent. Any such statement delivered
pursuant hereto may be relied upon by any owner of the Building or the Campus,
any prospective purchaser of the Building, any mortgagee or prospective
mortgagee of the Building, or any prospective assignee of any such mortgagee.

                  18.04 - GOVERNING LAW. This Lease shall be construed and
enforced in accordance with the laws of the State of Ohio.

                  18.05 - SUCCESSORS AND ASSIGNS. This Lease and the respective
rights and obligations of the parties hereto shall inure to the benefit of and
be binding upon the successors and assigns of the parties hereto, as well as the
parties themselves; provided, however, that Landlord, its successors and
assigns, shall be obligated to perform Landlord's covenants under this Lease
only during and in respect to their successive periods of ownership during the
Term of this Lease.

                  18.06 - SEVERABILITY OF INVALID PROVISIONS. If any provision
of this Lease shall be held to be invalid, void or unenforceable, the remaining
provisions hereof shall not be affected or impaired, and such remaining
provisions shall remain in full force and effect.

                  18.07 - CERTAIN WORDS, GENDER AND HEADINGS. As used in this
Lease, the word "person" shall mean and include, where appropriate, an
individual, corporation, partnership or other entity; the plural shall be
substituted for the singular and the singular for the plural, where appropriate;
and words of any gender shall include any other gender. The topical headings of
the several paragraphs of this Lease are inserted only as a matter of
convenience and reference, and do not affect, define, limit or describe the
scope or intent of this Lease.

                  18.08 - QUIET ENJOYMENT. So long as Tenant pays the prescribed
rent and performs or observes all of the terms, conditions, covenants and
obligations of this Lease required to be performed or observed by it hereunder,
Tenant shall, at all times during the Term hereof, have the peaceable and quiet
enjoyment, possession, occupancy and use of the Premises, without any
interference from Landlord or any person or persons claiming the Premises, by,
through or under Landlord.

                  18.09 - COMPLETE AGREEMENT; AMENDMENTS. This Lease, including
all Exhibits, Riders and Addenda, constitutes the entire agreement between the
parties hereto; it supersedes all previous understandings and agreements between
the parties, if any, and no oral or implied


                                    -20-


representation or understandings shall vary its terms; and it may not be
amended, except by a written instrument executed by both parties hereto.

                  18.10 - REASONABLE MODIFICATIONS. Tenant will consent to such
reasonable modifications of this Lease as Landlord may hereafter find it
necessary to make in order to obtain mortgage financing, provided that such
modifications (a) do not change the rental to be paid hereunder or the length of
the Term of the Lease; and (b) do not impose obligations upon Tenant which are
substantially or practically more burdensome to it than the obligations
contained herein.


                [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                    -21-



                  IN WITNESS WHEREOF, the parties hereto have executed this
Lease as of the day and year first above written.

Witnesses as to Landlord:                   LANDLORD:

                                            DISTRIBUTION LAND CORP., a Delaware
                                            corporation



/s/ Pat Rockel                              By: /s/ George R. Sappenfield
- --------------                                 --------------------------
Print Name: Pat Rockel                      George R. Sappenfield
            ----------
/s/ Amy E. Dietz                            Vice President - Real Estate
- ----------------
Print Name: Amy E. Dietz
            ------------
                                            ATTESTED BY:

/s/ Pat Rockel                              /s/ C. David Zoba
- --------------                              -----------------
Print Name: Pat Rockel                      C. David Zoba
            ----------                      Vice President and Senior Counsel
/s/ Amy E. Dietz                              - Real Estate
- ----------------
Print Name: Amy E. Dietz
            ------------


Witnesses as to Tenant:                     TENANT:

                                            BATH & BODY WORKS, INC., a
                                            Delaware corporation

/s/ Pat Rockel                              By: /s/ George R. Sappenfield
- --------------                                 --------------------------
Print Name: Pat Rockel                      George R. Sappenfield
            ----------                      Vice President - Real Estate
/s/ Amy E. Dietz
- ----------------
Print Name: Amy E. Dietz
            ------------
                                            ATTESTED BY:

/s/ Pat Rockel                              /s/ C. David Zoba
- ---------------                             -----------------
Print Name: Pat Rockel                      C. David Zoba
            ----------                      Vice President and Senior Counsel
/s/ Amy E. Dietz                              - Real Estate
- ----------------
Print Name: Amy E. Dietz
            ------------


                                    -22-





STATE OF OHIO,
COUNTY OF FRANKLIN, SS:

         The foregoing instrument was acknowledged before me this 18th day of
March, 1999, by George R. Sappenfield and C. David Zoba, Vice President - Real
Estate and Vice President and Senior Counsel - Real Estate, respectively, of
Distribution Land Corp., a Delaware corporation, on behalf of the corporation.


                                                     /s/ Amy E. Dietz
                                                     ----------------
                                                     Notary Public




STATE OF OHIO,
COUNTY OF FRANKLIN, SS:

         The foregoing instrument was acknowledged before me this 18th day of
March, 1999, by George R. Sappenfield and C. David Zoba, Vice President - Real
Estate and Vice President and Senior Counsel - Real Estate, respectively, of
Bath & Body Works, Inc., a Delaware corporation, on behalf of the corporation.


                                                     /s/ Amy E. Dietz
                                                     ----------------
                                                     Notary Public



                                    -23-



                                    EXHIBIT A

         (Represents a map of the 321.1 acre site located in Reynoldsburg. Ohio)






                                    EXHIBIT B

      Premises Description - Bath & Body Works, Inc. Distribution Center #7

  (Includes a map of the First and Second Floor of the Bath & Body Works, Inc.
                            Distribution Center #7)

- ------------------------------------------------------------ -----------------------------
                                                          
Office Space:                                                128,247 square feet
- ------------------------------------------------------------ -----------------------------
Distribution Space:                                          366,348 square feet
- ------------------------------------------------------------ -----------------------------
Pro Rata Share of Building Common Area:                      6,576 square feet
- ------------------------------------------------------------ -----------------------------


- ------------------------------------------------------------------------------------------------------------------
                             Bath & Body Works, Inc. Space in Distribution Center #7
- ------------------------------------------------------------------------------------------------------------------
                                         OFFICE                   DISTRIBUTION                   TOTAL
- ------------------------------ ---------------------------- -------------------------- ---------------------------
                                                                                 
         First Floor               61,072 square feet          341,004 square feet        402,076 square feet
- ------------------------------ ---------------------------- -------------------------- ---------------------------
         Second Floor              67,175 square feet          25,344 square feet          92,519 square feet
- ------------------------------ ---------------------------- -------------------------- ---------------------------

EX-10.28

                                                                Exhibit 10.28

                            INDEMNIFICATION AGREEMENT

       THIS AGREEMENT is made and entered into as of the 23rd day of March 2001
by and between INTIMATE BRANDS, INC., a Delaware corporation (the "Company"),
and the undersigned (the "Indemnitee").

                                    RECITALS

       WHEREAS, it is essential to the Company that it attract and retain as
directors and officers the most capable persons available; and

       WHEREAS, Indemnitee is a director and/or officer of the Company; and

       WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
public companies in the current environment; and

       WHEREAS, in recognition of Indemnitee's need for protection against
personal liability in order to enhance Indemnitee's continued service to the
Company in an effective manner, and in order to induce Indemnitee to continue to
provide services to the Company as a director or officer thereof, the Company
wishes to provide in this Agreement for the indemnification of Indemnitee to the
fullest extent permitted by law and as set forth in this Agreement;

       NOW THEREFORE, in consideration of the foregoing, the covenants contained
herein and Indemnitee's continued service to the Company, the Company and
Indemnitee, intending to be legally bound, hereby agree as follows:

       Section 1. Definitions. The following terms, as used herein, shall have
the following respective meanings:

              "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings relative to the
foregoing.

              "Change in control" shall be deemed to have occurred if, other
than as approved by a majority of the Board of Directors of the Company in
office immediately prior to such event (a) any person, other than (i) a trustee
or other fiduciary holding Voting Securities under an employee benefit plan of
the Company, (ii) a corporation owned directly or indirectly by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company or (iii) The Limited, Inc. ("The Limited"), any subsidiary of The
Limited or any successor to The Limited or any subsidiary thereof or (iv) Leslie
H. Wexner, his heirs, executors or administrators, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) of Voting Securities representing 20% or more of the total voting power
represented by the Company's then outstanding Voting Securities, or (b) during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Company and any new director
whose election by the Board of Directors or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds of the
directors



then still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for
any reason to constitute a majority thereof, or (c) the stockholders of the
Company approve (i) a merger or consolidation of the Company with any other
corporation, other than (A) a merger or consolidation which would result in the
Voting Securities outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting Securities of
the surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation and (B) a merger or consolidation
with The Limited, any subsidiary of The Limited or any successor to The Limited
or any subsidiary thereof, or (ii) a plan of complete liquidation of the Company
or an agreement for the sale or disposition by the Company (in one transaction
or a series of transactions) of all or substantially all of the Company's
assets.

              "Claim" means (a) any threatened, pending or completed action,
suit, proceeding or arbitration or other alternative dispute resolution
mechanism, or (b) any inquiry, hearing or investigation, whether conducted by
the Company or any other Person, that Indemnitee in good faith believes might
lead to the institution of any such action, suit, proceeding or arbitration or
other alternative dispute resolution mechanism, in each case whether civil,
criminal, administrative or other (whether or not the claims or allegations
therein are groundless, false or fraudulent) and includes, without limitation,
those brought by or in the name of the Company or any director or officer of the
Company.

              "Company Agent" means serving as a director, officer, partner,
employee, agent, trustee or fiduciary of the Company, any Subsidiary or any
Other Enterprise.

              "Covered Event" means any event or occurrence on or after the date
of this Agreement related to the fact that Indemnitee is or was a Company Agent
or related to anything done or not done by Indemnitee in any such capacity, and
includes, without limitation, any such event or occurrence (a) arising from
performance of the responsibilities, obligations or duties imposed by ERISA or
any similar applicable provisions of state or common law, or (b) arising from
any merger, consolidation or other business combination involving the Company,
any Subsidiary or any Other Enterprise, including without limitation any sale or
other transfer of all or substantially all of the business or assets of the
Company, any Subsidiary or any Other Enterprise.

              "D & O Insurance" means the directors' and officers' liability
insurance of the Company in effect on the date of this Agreement, and any
replacement or substitute policies issued by one or more reputable insurers
providing in all respects coverage at least comparable to and in the same amount
as that provided by the policy in effect on the date of this Agreement.

              "Determination" means a determination made by (a) a majority vote
of a quorum of Disinterested Directors; (b) Independent Legal Counsel, in a
written opinion addressed to the Company and Indemnitee; (c) the stockholders of
the Company; or (d) a decision by a court of competent jurisdiction not subject
to further appeal.

              "Disinterested Director" shall be a director of the Company who is
not or was not a party to the Claim giving rise to the subject matter of a
Determination.

              "Expenses" includes attorneys' fees and all other costs, travel
expenses, fees of experts, transcript costs, filing fees, witness fees,
telephone charges, postage,

                                      -2-



copying costs, delivery services fees and other expenses and obligations of any
nature whatsoever paid or incurred in connection with investigating, prosecuting
or defending, being a witness in or participating in (including on appeal), or
preparing to prosecute or defend, be a witness in or participate in any Claim,
for which Indemnitee is or becomes legally obligated to pay.

              "Independent Legal Counsel" shall mean a law firm or a member of a
law firm that (a) neither is nor in the past five years has been retained to
represent in any material matter the Company, any Subsidiary, Indemnitee or any
other party to the Claim, (b) under applicable standards of professional conduct
then prevailing would not have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee's rights to
indemnification under this Agreement and (c) is reasonably acceptable to the
Company and Indemnitee.

              "Loss" means any amount which Indemnitee is legally obligated to
pay as a result of any Claim, including, without limitation (a) all judgments,
penalties and fines, and amounts paid or to be paid in settlement, (b) all
interest, assessments and other charges paid or payable in connection therewith
and (c) any federal, state, local or foreign taxes imposed (net of the value to
Indemnitee of any tax benefits resulting from tax deductions or otherwise) as a
result of the actual or deemed receipt of any payments under this Agreement,
including the creation of the Trust.

              "Other Enterprise" means any corporation (other than the Company
or any Subsidiary), partnership, joint venture, association, employee benefit
plan, trust or other enterprise or organization for which Indemnitee acts as a
Company Agent at the request of the Company or any Subsidiary. Indemnitee shall
be deemed to be acting as a Company Agent of an Other Enterprise at the request
of the Company with respect to any Other Enterprise in which the Company or any
Subsidiary has an investment as to which Indemnitee shall act as a Company Agent
from time to time. Indemnitee shall be deemed to be acting as a Company Agent of
an Other Enterprise at the request of the Company, if Indemnitee acts as a
Company Agent of an Other Enterprise at the written or oral request of the Board
of Directors of the Company or of any Subsidiary by which the Indemnitee is
employed from time to time, at the written or oral request of an Executive
Officer of the Company or of any Subsidiary by which the Indemnitee is employed
from time to time or if Indemnitee acts as a Company Agent of an Other
Enterprise by reason of being requested, elected, hired or retained to succeed
or assume the responsibilities of a Person who previously acted as a Company
Agent of an Other Enterprise at the request of the Company.

              "Parent" shall have the meaning set forth in the regulations of
the Securities and Exchange Commission under the Securities Act of 1933, as
amended; provided the term "Parent" shall not include the board of directors of
a corporation in its capacity as a board of directors, and provided further that
if the other party to any transaction referred to in Section 12.1.2 has no
Parent as so defined above, "Parent" shall mean such other party.

              "Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government (or any subdivision, department, commission or agency thereof), and
includes without limitation any "person", as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended.

              "Potential Change in Control" shall be deemed to have occurred if
(a) the Company enters into an agreement or arrangement the consummation of
which would


                                      -3-


result in the occurrence of a Change in Control, (b) any Person (including the
Company) publicly announces an intention to take or to consider taking actions
which if consummated would constitute a Change in Control or (c) the Board of
Directors of the Company adopts a resolution to the effect that, for purposes of
this Agreement, a Potential Change in Control has occurred.

              "Subsidiary" means any corporation of which more than 50 % of the
outstanding stock having ordinary voting power to elect a majority of the board
of directors of such corporation is now or hereafter owned, directly or
indirectly, by the Company.

              "Trust" has the meaning set forth in Section 9.2.

              "Voting Securities" means any securities of the Company, which
vote generally in the election of directors.

       Section 2. Indemnification.

              2.1. GENERAL INDEMNITY OBLIGATION.

                    2.1.1. Subject to the remaining provisions of this
Agreement, the Company hereby indemnifies and holds Indemnitee harmless for any
Losses or Expenses arising from any Claims relating to (or arising in whole or
in part out of) any Covered Event, including, without limitation, any Claim the
basis of which is any actual or alleged breach of duty, neglect, error,
misstatement, misleading statement, omission or other act done or attempted by
Indemnitee in the capacity as a Company Agent, whether or not Indemnitee is
acting or serving in such capacity at the date of this Agreement, at the time
liability is incurred or at the time the Claim is initiated.

                    2.1.2. The obligations of the Company under this Agreement
shall apply to the fullest extent authorized or permitted by the provisions of
applicable law, as presently in effect or as changed after the date of this
Agreement, whether by statute or judicial decision (but, in the case of any
subsequent change, only to the extent that such change permits the Company to
provide broader indemnification than permitted prior to giving effect thereto).

                    2.1.3. Indemnitee shall not be entitled to indemnification
pursuant to this Agreement in connection with any Claim initiated by Indemnitee
against the Company or any director or officer of the Company, unless the
Company has joined in or consented to the initiation of such Claim; provided,
the provisions of this Section 2.1.3 shall not apply following a Change in
Control to Claims seeking enforcement of this Agreement, the Certificate of
Incorporation or Bylaws of the Company or any other agreement now or hereafter
in effect relating to indemnification for Covered Events.

                    2.1.4. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the Losses
or Expenses paid with respect to a Claim but not, however, for the total amount
thereof, the Company shall nevertheless indemnify and hold Indemnitee harmless
against the portion thereof to which Indemnitee is entitled.

                    2.1.5. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee has been successful on the merits or
otherwise in defense of any or all Claims relating to (or arising in whole or in
part out of) a Covered Event or

                                      -4-



in defense of any issue or matter therein, including dismissal without
prejudice, the Company shall indemnify and hold Indemnitee harmless against all
expenses incurred in connection therewith.

              2.2. INDEMNIFICATION FOR SERVING AS WITNESS AND CERTAIN OTHER
CLAIMS. Notwithstanding any other provision of this Agreement, the Company
hereby indemnifies and holds Indemnitee harmless for all Expenses in connection
with (a) the preparation to serve or service as a witness in any Claim in which
Indemnitee is not a party, if such actual or proposed service as a witness arose
by reason of Indemnitee having served as a Company Agent on or the date of this
Agreement and (b) any Claim initiated by Indemnitee on or after the date of this
Agreement (i) for recovery under any directors' and officers' liability
insurance maintained by the Company or (ii) following a Change in Control, for
enforcement of the indemnification obligations of the Company under this
Agreement, the Certificate of Incorporation or Bylaws of the Company or any
other agreement now or hereafter in effect relating to indemnification for
Covered Events, regardless of whether Indemnitee ultimately is determined to be
entitled to such insurance recovery or indemnification, as the case may be.

       Section 3. Limitations on Indemnification.

              3.1.  COVERAGE  LIMITATIONS.  No  indemnification  is available
pursuant to the  provisions  of this Agreement:

                    3.1.1. If such indemnification is not lawful;

                    3.1.2. If Indemnitee's conduct giving rise to the Claim with
respect to which indemnification is requested was knowingly fraudulent, a
knowing violation of law, deliberately dishonest or in bad faith or constituted
willful misconduct;

                    3.1.3.  In respect of any Claim based upon or  attributable
to Indemnitee  gaining in fact any personal profit or advantage to which
Indemnitee was not legally entitled;

                    3.1.4. In respect of any Claim for an accounting of profits
made from the purchase or sale by Indemnitee of securities of the Company within
the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended;
or

                    3.1.5. In respect of any Claim based upon any violation of
Section 174 of the Delaware General Corporation Law, as amended.

              3.2. NO DUPLICATION OF PAYMENTS. The Company shall not be liable
under this Agreement to make any payment otherwise due and payable to the extent
Indemnitee has otherwise actually received payment (whether under the
Certificate of Incorporation or the Bylaws of the Company, the D & O Insurance
or otherwise) of any amounts otherwise due and payable under this Agreement.

       Section 4. Payments and Determinations.

              4.1. ADVANCEMENT AND REIMBURSEMENT OF EXPENSES. If requested by
Indemnitee, the Company shall advance to Indemnitee, no later than two business
days following any such request, any and all Expenses for which indemnification
is available under Section 2. Upon any Determination that Indemnitee is not
permitted to be indemnified for any expenses so advanced, Indemnitee hereby
agrees to reimburse the Company (or, as appropriate, any Trust established
pursuant to Section 9.2) for all

                                      -5-



such amounts previously paid. Such obligation of reimbursement shall be
unsecured and no interest shall be charged thereon.

              4.2. PAYMENT AND DETERMINATION PROCEDURES.

                    4.2.1. To obtain indemnification under this Agreement,
Indemnitee shall submit to the Company a written request, together with such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall, promptly upon
receipt of such a request for indemnification, advise the Board of Directors in
writing that Indemnitee has requested indemnification.

                    4.2.2. Upon written request by Indemnitee for
indemnification pursuant to Section 4.2.1, a Determination with respect to
Indemnitee's entitlement thereto shall be made in the specific case (a) if a
Change in Control shall have occurred, as provided in Section 9.1; and (b) if a
Change in Control shall not have occurred, by (i) the Board of Directors by a
majority vote of a quorum of Disinterested Directors, (ii) Independent Legal
Counsel, if either (A) a quorum of Disinterested Directors is not obtainable or
(B) a majority vote of a quorum of Disinterested Directors otherwise so directs
or (iii) the stockholders of the Company (if submitted by the Board of
Directors). If a Determination is made that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within 10 days after such
Determination.

                    4.2.3. If no Determination is made within 60 days after
receipt by the Company of a request for indemnification by Indemnitee pursuant
to Section 4.2.1, a Determination shall be deemed to have been made that
Indemnitee is entitled to the requested indemnification (and the Company shall
pay the related Losses and Expenses no later than 10 days after the expiration
of such 60-day period), except where such indemnification is not lawful;
provided, however, that (a) such 60-day period may be extended for a reasonable
time, not to exceed an additional 30 days, if the Person or Persons making the
Determination in good faith require such additional time for obtaining or
evaluating the documentation and information relating thereto; and (b) the
foregoing provisions of this Section 4.2.3 shall not apply (i) if the
Determination is to be made by the stockholders of the Company and if (A) within
15 days after receipt by the Company of the request by Indemnitee pursuant to
Section 4.2.1 the Board of Directors has resolved to submit such Determination
to the stockholders at an annual meeting of the stockholders to be held within
75 days after such receipt, and such Determination is made at such annual
meeting, or (B) a special meeting of stockholders is called within 15 days after
such receipt for the purpose of making such Determination, such meeting is held
for such purpose within 60 days after having been so called and such
Determination is made at such special meeting, or (ii) if the Determination is
to be made by Independent Legal Counsel.

       Section 5. D & O Insurance.

              5.1.  CURRENT  POLICIES.  The Company  hereby  represents  and
warrants to Indemnitee  that the D & O Insurance is in full force and effect.

              5.2. CONTINUED COVERAGE. The Company shall maintain the D & O
Insurance for so long as this Agreement remains in effect. The Company shall
cause the D & O Insurance to cover Indemnitee, in accordance with its terms and
at all times such

                                      -6-



insurance is in effect, to the maximum extent of the coverage provided thereby
for any director or officer of the Company.

              5.3. INDEMNIFICATION. In the event of any reduction in, or
cancellation of, the D & O Insurance (whether voluntary or involuntary on behalf
of the Company), the Company shall, and hereby agrees to, indemnify and hold
Indemnitee harmless against any Losses or Expenses which Indemnitee is or
becomes obligated to pay as a result of the Company's failure to maintain the D
& O Insurance in effect in accordance with the provisions of Section 5.2, to the
fullest extent permitted by applicable law, notwithstanding any provision of the
Certificate of Incorporation or the Bylaws of the Company, or any other
agreement now or hereafter in effect relating to indemnification for Covered
Events. The indemnification available under this Section 5.3 is in addition to
all other obligations of indemnification of the Company under this Agreement and
shall be the only remedy of Indemnitee for a breach by the Company of its
obligations set forth in Section 5.2.

       Section 6. Subrogation. In the event of any payment under this Agreement
to or on behalf of Indemnitee, the Company shall be subrogated to the extent of
such payment to all of the rights of recovery of Indemnitee against any Person
other than the Company or Indemnitee in respect of the Claim giving rise to such
payment. Indemnitee shall execute all papers reasonably required and shall do
everything reasonably necessary to secure such rights, including the execution
of such documents reasonably necessary to enable the Company effectively to
bring suit to enforce such rights.

       Section 7. Notifications and Defense of Claims.

              7.1. NOTICE BY INDEMNITEE. Indemnitee shall give notice in writing
to the Company as soon as practicable after Indemnitee becomes aware of any
Claim with respect to which indemnification will or could be sought under this
Agreement; provided the failure of Indemnitee to give such notice, or any delay
in giving such notice, shall not relieve the Company of its obligations under
this Agreement except to the extent the Company is actually prejudiced by any
such failure or delay.

              7.2. INSURANCE. The Company shall give prompt notice of the
commencement of any Claim relating to Covered Events to the insurers on the D &
O Insurance, if any, in accordance with the procedures set forth in the
respective policies in favor of Indemnitee. The Company shall thereafter take
all necessary action to cause such insurers to pay, on behalf of Indemnitee, all
amounts payable as a result of such Claims in accordance with the terms of such
policies.

              7.3. DEFENSE.

                    7.3.1. In the event any Claim relating to Covered Events is
by or in the right of the Company, Indemnitee may, at the option of Indemnitee,
either control the defense therefor or accept the defense provided under the D &
O Insurance; provided, however, that Indemnitee may not control the defense if
such decision would jeopardize the coverage provided by the D & O Insurance, if
any, to the Company or the other directors and officers covered thereby.

                    7.3.2. In the event any Claim relating to Covered Events is
other than by or in the right of the Company, Indemnitee may, at the option of
Indemnitee, either control the defense thereof, require the Company to defend or
accept the defense provided under the D & O Insurance; provided, however, that
Indemnitee may

                                      -7-



not control the defense or require the Company to defend if such decision would
jeopardize the coverage provided by the D & O Insurance to the Company or the
other directors and officers covered thereby. In the event that Indemnitee
requires the Company to so defend, or in the event that Indemnitee proceeds
under the D & O Insurance but Indemnitee determines that such insurers under the
D & O Insurance are unable or unwilling to adequately defend Indemnitee against
any such Claim, the Company shall promptly undertake to defend any such Claim,
at the Company's sole cost and expense, utilizing counsel of Indemnitee's choice
who has been approved by the Company. If appropriate, the Company shall have the
right to participate in the defense of any such Claim.

                    7.3.3. In the event the Company shall fail, as required by
any election by Indemnitee pursuant to Section 7.3.2, timely to defend
Indemnitee against any such Claim, Indemnitee shall have the right to do so,
including without limitation, the right (notwithstanding Section 7.3.4) to make
any settlement thereof, and to recover from the Company, to the extent otherwise
permitted by this Agreement, all Expenses and Losses paid as a result thereof.

                    7.3.4. The Company shall have no obligation under this
Agreement with respect to any amounts paid or to be paid in settlement of any
Claim without the express prior written consent of the Company to any related
settlement. In no event shall the Company authorize any settlement imposing any
liability or other obligations on Indemnitee without the express prior written
consent of Indemnitee. Neither the Company nor Indemnitee shall unreasonably
withhold consent to any proposed settlement.

       Section 8. Determinations and Related Matters.

              8.1. PRESUMPTIONS.

                    8.1.1. If a Change in Control shall have occurred,
Indemnitee shall be entitled to a rebuttable presumption that Indemnitee is
entitled to indemnification under this Agreement and the Company shall have the
burden of proof in rebutting such presumption.

                    8.1.2. The termination of any Claim by judgment, order,
settlement (whether with or without court approval) or conviction, or upon a
plea of nolo contendere or its equivalent, shall not adversely affect either the
right of Indemnitee to indemnification under this Agreement or the presumptions
to which Indemnitee is otherwise entitled pursuant to the provisions of this
Agreement nor create a presumption that Indemnitee did not meet any particular
standard of conduct or have a particular belief or that a court has determined
that indemnification is not permitted by applicable law.

              8.2. APPEALS; ENFORCEMENT.

                    8.2.1. In the event that (a) a Determination is made that
Indemnitee shall not be entitled to indemnification under this Agreement, (b)
any Determination to be made by Independent Legal Counsel is not made within 90
days of receipt by the Company of a request for indemnification pursuant to
Section 4.2.1 or (c) the Company fails to otherwise perform any of its
obligations under this Agreement (including, without limitation, its obligation
to make payments to Indemnitee following any Determination made or deemed to
have been made that such payments are appropriate), Indemnitee shall have the
right to commence a Claim in any court of

                                      -8-



competent jurisdiction, as appropriate, to seek a Determination by the court, to
challenge or appeal any Determination which has been made, or to otherwise
enforce this Agreement. If a Change of Control shall have occurred, Indemnitee
shall have the option to have any such Claim conducted by a single arbitrator
pursuant to the rules of the American Arbitration Association. Any such judicial
proceeding challenging or appealing any Determination shall be deemed to be
conducted DE NOVO and without prejudice by reason of any prior Determination to
the effect that Indemnitee is not entitled to indemnification under this
Agreement. Any such Claim shall be at the sole expense of Indemnitee except as
provided in Section 9.3.

                    8.2.2. If a Determination shall have been made or deemed to
have been made pursuant to this Agreement that Indemnitee is entitled to
indemnification, the Company shall be bound by such Determination in any
judicial proceeding or arbitration commenced pursuant to this Section 8.2,
except if such indemnification is unlawful.

                    8.2.3. The Company shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section 8.2 that
the procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such arbitrator
that the Company is bound by all the provisions of this Agreement. The Company
hereby consents to service of process and to appear in any such judicial or
arbitration proceedings and shall not oppose Indemnitee's right to commence any
such proceedings.

              8.3. PROCEDURES. Indemnitee shall cooperate with the Company and
with any Person making any Determination with respect to any Claim for which a
claim for indemnification under this Agreement has been made, as the Company may
reasonably require. Indemnitee shall provide to the Company or the Person making
any Determination, upon reasonable advance request, any documentation or
information reasonably available to Indemnitee and necessary to (a) the Company
with respect to any such Claim or (b) the Person making any Determination with
respect thereto.

       Section 9. Change in Control Procedures.

              9.1. DETERMINATIONS. If there is a Change in Control, any
Determination to be made under Section 4 shall be made by Independent Legal
Counsel selected by Indemnitee and approved by the Company (which approval shall
not be unreasonably withheld). The Company shall pay the reasonable fees of the
Independent Legal Counsel and indemnify fully such Independent Legal Counsel
against any and all expenses (including attorneys' fees), claims, liabilities
and damages arising out of or relating to this Agreement or the engagement of
Independent Legal Counsel pursuant hereto.

              9.2. ESTABLISHMENT OF TRUST. Following the occurrence of any
Potential Change in Control, the Company, upon receipt of a written request from
Indemnitee, shall create a Trust (the "Trust") for the benefit of Indemnitee,
the trustee of which shall be a bank or similar financial institution with trust
powers chosen by Indemnitee. From time to time, upon the written request of
Indemnitee, the Company shall fund the Trust in amounts sufficient to satisfy
any and all Losses and Expenses reasonably anticipated at the time of each such
request to be incurred by Indemnitee for which indemnification may be available
under this Agreement. The amount or amounts to be deposited in the Trust
pursuant to the foregoing funding obligation shall be determined by mutual
agreement of Indemnitee and the Company or, if the Company

                                      -9-



and Indemnitee are unable to reach such an agreement or, in any event, a Change
in Control has occurred, by Independent Legal Counsel (selected pursuant to
Section 9.1). The terms of the Trust shall provide that, except upon the prior
written consent of Indemnitee and the Company, (a) the Trust shall not be
revoked or the principal thereof invaded, other than to make payments to
unsatisfied judgment creditors of the Company, (b) the Trust shall continue to
be funded by the Company in accordance with the funding obligations set forth in
this Section, (c) the Trustee shall promptly pay or advance to Indemnitee any
amounts to which Indemnitee shall be entitled pursuant to this Agreement, and
(d) all unexpended funds in the Trust shall revert to the Company upon a
Determination by Independent Legal Counsel (selected pursuant to Section 9.1) or
a court of competent jurisdiction that Indemnitee has been fully indemnified
under the terms of this Agreement. All income earned on the assets held in the
trust shall be reported as income by the Company for federal, state, local and
foreign tax purposes.

              9.3. EXPENSES. Following any Change in Control, the Company shall
be liable for, and shall pay the Expenses paid or incurred by Indemnitee in
connection with the making of any Determination (irrespective of the
determination as to Indemnitee's entitlement to indemnification) or the
prosecution of any Claim pursuant to Section 8.2, and the Company hereby agrees
to indemnify and hold Indemnitee harmless therefrom. If requested by counsel for
Indemnitee, the Company shall promptly give such counsel an appropriate written
agreement with respect to the payment of its fees and expenses and such other
matters as may be reasonably requested by such counsel.

       Section 10. Period of Limitations. No legal action shall be brought and
no cause of action shall be asserted by or in the right of the Company, any
Subsidiary, any Other Enterprise or any Affiliate of the Company against
Indemnitee or Indemnitee's spouse, heirs, executors, administrators or personal
or legal representatives after the expiration of two years from the date of
accrual of such cause of action, and any claim or cause of action of the
Company, any Subsidiary, any Other Enterprise or any Affiliate of the Company
shall be extinguished and deemed released unless asserted by the timely filing
of a legal action within such two-year period; provided, however, that if any
shorter period of limitations, whether established by statute or judicial
decision, is otherwise applicable to any such cause of action such shorter
period shall govern.

       Section 11. Contribution. If the indemnification provisions of this
Agreement should be unenforceable under applicable law in whole or in part or
insufficient to hold Indemnitee harmless in respect of any Losses and Expenses
incurred by Indemnitee, then for purposes of this Section 11, the Company shall
be treated as if it were, or was threatened to be made, a party defendant to the
subject Claim and the Company shall contribute to the amounts paid or payable by
Indemnitee as a result of such Losses and Expenses incurred by Indemnitee in
such proportion as is appropriate to reflect the relative benefits accruing to
the Company on the one hand and Indemnitee on the other and the relative fault
of the Company on the one hand and Indemnitee on the other in connection with
such Claim, as well as any other relevant equitable considerations. For purposes
of this Section 11 the relative benefit of the Company shall be deemed to be the
benefits accruing to it and to all of its directors, officers, employees and
agents (other than Indemnitee) on the one hand, as a group and treated as one
entity, and the relative benefit of Indemnitee shall be deemed to be an amount
not greater than the Indemnitee's yearly base salary or Indemnitee's
compensation from the Company during the first year in which the Covered Event
forming the basis for the subject Claim was alleged to have occurred. The
relative fault

                                      -10-



shall be determined by reference to, among other things, the fault of the
Company and all of its directors, officers, employees and agents (other than
Indemnitee) on the one hand, as a group and treated as one entity, and
Indemnitee's and such group's relative intent, knowledge, access to information
and opportunity to have altered or prevented the Covered Event forming the basis
for the subject Claim.

       Section 12. Miscellaneous Provisions.

              12.1. SUCCESSORS AND ASSIGNS, ETC.

                    12.1.1. This Agreement shall be binding upon and inure to
the benefit of (a) the Company, its successors and assigns (including any direct
or indirect successor by merger, consolidation or operation of law or by
transfer of all or substantially all of its assets) and (b) Indemnitee and the
heirs, personal and legal representatives, executors, administrators or assigns
of Indemnitee.

                    12.1.2. The Company shall not consummate any consolidation,
merger or other business combination, nor will it transfer 50% or more of its
assets (in one or a series of related transactions), unless the ultimate Parent
of the successor to the business or assets of the Company shall have first
executed an agreement, in form and substance satisfactory to Indemnitee, to
expressly assume all obligations of the Company under this Agreement and agree
to perform this Agreement in accordance with its terms, in the same manner and
to the same extent that the Company would be required to perform this Agreement
if no such transaction had taken place; provided that, if the Parent is not the
Company, the legality of payment of indemnity by the Parent shall be determined
by reference to the fact that such indemnity is to be paid by the Parent rather
than the Company.

              12.2. SEVERABILITY. The provisions of this Agreement are
severable. If any provision of this Agreement shall be held by any court of
competent jurisdiction to be invalid, void or unenforceable, such provision
shall be deemed to be modified to the minimum extent necessary to avoid a
violation of law and, as so modified, such provision and the remaining
provisions shall remain valid and enforceable in accordance with their terms to
the fullest extent permitted by law.

              12.3. RIGHTS NOT EXCLUSIVE; CONTINUATION OF RIGHT OF
INDEMNIFICATION. Nothing in this Agreement shall be deemed to diminish or
otherwise restrict Indemnitee's right to indemnification pursuant to any
provision of the Certificate of Incorporation or Bylaws of the Company, any
agreement, vote of stockholders or Disinterested Directors, applicable law or
otherwise. This Agreement shall be effective as of the date first above written
and continue in effect until no Claims relating to any Covered Event may be
asserted against Indemnitee and until any Claims commenced prior thereto are
finally terminated and resolved, regardless of whether Indemnitee continues to
serve as an officer of the Company, any Subsidiary or any Other Enterprise.

              12.4. NO  EMPLOYMENT  AGREEMENT.  Nothing  contained in this
Agreement  shall be construed as giving Indemnitee any right to be retained in
the employ of the Company, any Subsidiary or any Other Enterprise.

              12.5. SUBSEQUENT AMENDMENT. No amendment, termination or repeal of
any provision of the Certificate of Incorporation or Bylaws of the Company, or
any respective successors thereto, or of any relevant provision of any
applicable law, shall affect or diminish in any way the rights of Indemnitee to
indemnification, or the

                                      -11-



obligations of the Company, arising under this Agreement, whether the alleged
actions or conduct of Indemnitee giving rise to the necessity of such
indemnification arose before or after any such amendment, termination or repeal.

              12.6. NOTICES. Notices required under this Agreement shall be
given in writing and shall be deemed given when delivered in person or sent by
certified or registered mail, return receipt requested, postage prepaid. Notices
shall be directed to the Company Three Limited Parkway, Columbus, OH 43230,
Attention: Chairman of the Board, and to Indemnitee at the residential address
as shown on the Company's records (or such other address as either party may
designate in writing to the other).

              12.7.  GOVERNING  LAW. This  Agreement  shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts  made and  performed in such state  without  giving
effect to the principles of conflict of laws.

              12.8.  HEADINGS.  The headings of the Sections of this  Agreement
are inserted for  convenience  only and shall not be deemed to constitute part
of this Agreement or to affect the construction thereof.

              12.9.  COUNTERPARTS.  This Agreement may be executed in any
number of counterparts all of which taken together shall constitute one
instrument.

              12.10. MODIFICATION AND WAIVER. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver or any of the provisions of this Agreement
shall constitute, or be deemed to constitute, a waiver of any other provision
hereof (whether or not similar) nor shall any such waiver constitute a
continuing waiver.

       The parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.


INTIMATE BRANDS, INC.                     INDEMNITEE



By   /s/ Samuel P. Fried                   /s/ Donna A. James
    -----------------------------         ----------------------------
       Samuel P. Fried                      Donna A. James
       Senior Vice President


                                      -12-

EX-13

summary ofdkdkd

                                                                  Exhibit 13


TEN-YEAR SELECTED FINANCIAL DATA

(Millions except per share amounts, ratios and store and associate data)




Fiscal Year                            2000(1)       1999          1998         1997          1996
- -------------------------------------------------------------------------------------------------------
                                                                              
SUMMARY OF OPERATIONS
Net sales                            $ 5,117       $ 4,632       $ 3,989       $ 3,719       $ 3,093
Gross income                         $ 2,042       $ 1,895       $ 1,606       $ 1,372       $ 1,077
Operating income                     $   744 (2)   $   794       $   671       $   496 (2)   $   456 (2)
Operating income as a
   percentage of sales                  14.5%(2)      17.1%         16.8%         13.3%(2)      14.8%(2)
Net income                           $   432 (2)   $   459       $   394       $   284 (2)   $   257 (2)
Net income as a
   percentage of sales                   8.5%(2)       9.9%          9.9%          7.6%(2)       8.3%(2)

PER SHARE RESULTS
Basic net income                     $  0.88 (2)   $  0.92       $  0.75       $  0.54 (2)   $  0.48 (2)
Diluted net income                   $  0.87 (2)   $  0.90       $  0.74       $  0.53 (2)   $  0.48 (2)
Dividends                            $  0.28       $  0.27       $  0.27       $  0.25       $  0.23
Book value                           $  1.36       $  1.09       $  1.18       $  1.00       $  0.71
Weighted average diluted
   shares outstanding                    499           508           530           532           531

OTHER FINANCIAL INFORMATION
Total assets                         $ 1,457       $ 1,384       $ 1,448       $ 1,348       $ 1,135
Return on average assets                  30%(2)        32%           28%           23%(2)        25%(2)
Working capital                      $   122       $   125       $   419       $   450       $   328
Current ratio                            1.2           1.2           1.8           2.1           2.0
Capital expenditures                 $   245       $   206       $   122       $   124       $   124
Long-term debt                       $   100       $   100       $   250       $   350       $   350


Debt-to-equity ratio                      15%           18%           41%           66%           93%
Shareholders' equity                 $   665       $   545       $   609       $   531       $   377
Return on average
   shareholders' equity                   71%(2)        80%           69%           63%(2)        83%(2)
Comparable store sales increase            4%           12%            5%           11%            7%

STORES AND ASSOCIATES
AT END OF YEAR
Total number of stores open            2,390         2,110         1,890         1,710         1,609
Selling square feet                7,246,000     6,466,000     5,794,000     5,328,000     5,047,000
Number of associates                  69,000        60,000        55,000        50,000        43,900






Fiscal Year                            1995(1)       1994          1993         1992          1991
- -------------------------------------------------------------------------------------------------------
                                                                              
SUMMARY OF OPERATIONS
Net sales                            $ 2,613       $ 2,108       $ 1,631       $ 1,325       $ 1,199
Gross income                         $   856       $   697       $   497       $   398       $   367
Operating income                     $   384       $   334       $   218       $   167       $   178
Operating income as a
   percentage of sales                  14.7%         15.9%         13.4%         12.6%         14.8%
Net income                           $   203       $   200       $   132       $   102       $   106
Net income as a
   percentage of sales                   7.8%          9.5%          8.1%          7.7%          8.9%

PER SHARE RESULTS
Basic net income                     $  0.44       $  0.45       $  0.30       $  0.23       $  0.24
Diluted net income                   $  0.44       $  0.45       $  0.30       $  0.23       $  0.24
Dividends                            $  0.06 (3)        --            --            --            --
Book value                           $  0.46       $  1.25       $  1.07       $  1.03       $  0.84
Weighted average diluted
   shares outstanding                    465           441           441           441           441

OTHER FINANCIAL INFORMATION
Total assets                         $   943       $   769       $   655       $   611       $   487
Return on average assets                  24%           29%           21%           19%           26%
Working capital                      $   217       $   198       $   157       $   152       $   170
Current ratio                            1.8           2.2           2.3           2.6           3.1
Capital expenditures                 $   128       $   107       $    81       $    79       $    77
Long-term debt                       $   350            --            --            --            --


Debt-to-equity ratio                     143%           --            --            --            --
Shareholders' equity                 $   245       $   550       $   469       $   455       $   371
Return on average
   shareholders' equity                   51%           39%           29%           25%           36%
Comparable store sales increase            1%           13%            9%            1%            8%

STORES AND ASSOCIATES
AT END OF YEAR
Total number of stores open            1,293         1,037           879           743           662
Selling square feet                4,230,000     3,419,000     2,915,000     2,349,000     1,895,000
Number of associates                  39,300        30,100        22,500        15,900        14,200


(1) FIFTY-THREE-WEEK FISCAL YEAR.

(2) INCLUDES THE EFFECT OF SPECIAL AND NONRECURRING CHARGES OF $9.9 MILLION IN
    2000 (SEE NOTE 2 TO THE CONSOLIDATED FINANCIAL STATEMENTS), $67.6 MILLION IN
    1997 AND $12.0 MILLION IN 1996.

(3) REPRESENTS ONE QUARTER'S DIVIDEND SUBSEQUENT TO THE COMPANY'S OCTOBER 1995
    INITIAL PUBLIC OFFERING.

NOTE: AMOUNTS FOR FISCAL YEARS 1995-1999 REFLECT THE RECLASSIFICATION OF CATALOG
SHIPPING AND HANDLING REVENUES AND COSTS AND ASSOCIATE DISCOUNTS (SEE NOTE 1 TO
THE CONSOLIDATED FINANCIAL STATEMENTS).

26



MANAGEMENT'S DISCUSSION AND ANALYSIS

RESULTS OF OPERATIONS

Net sales for the fourteen-week fourth quarter of 2000 were $1.938 billion, an
increase of 5% from $1.838 billion for the thirteen-week fourth quarter a year
ago. Gross income decreased to $813.9 million from $830.1 million in 1999 and
operating income decreased to $377.4 million from $470.8 million in 1999.
Earnings per share were $0.45 versus $0.55 in 1999. In the fourth quarter of
2000, operating income included a $9.9 million special and nonrecurring charge
to close Bath & Body Works' nine stores in the United Kingdom. Excluding this
charge in 2000, earnings per share were $0.46 versus $0.55 for the fourth
quarter of 1999.

Net sales for the fifty-three-week year ended February 3, 2001 were $5.117
billion, an increase of 10% from $4.632 billion for the fifty-two-week year
ended January 29, 2000. Gross income increased to $2.042 billion from $1.895
billion in 1999 and operating income decreased to $744.5 million from $793.5
million in 1999. Earnings per share were $0.87 compared to $0.90 last year.
Excluding the special and nonrecurring charge in 2000, earnings per share were
$0.88 compared to $0.90 last year.

FINANCIAL HIGHLIGHTS

THE FOLLOWING SUMMARIZED FINANCIAL DATA COMPARES REPORTED 2000 RESULTS TO THE
COMPARABLE PERIODS FOR 1999 AND 1998:



                                                                                              % Change    % Change
                                                           2000*       1999         1998      2000-1999   1999-1998
- --------------------------------------------------------------------------------------------------------------------
                                                                                             
NET SALES (Millions)
Victoria's Secret Stores                                  $2,339      $2,122       $1,816        10%         17%
Bath & Body Works                                          1,785       1,530        1,254        17%         22%
Other                                                         31          24           25        nm          nm
- --------------------------------------------------------------------------------------------------------------------
TOTAL RETAIL SALES                                         4,155       3,676        3,095        13%         19%
- --------------------------------------------------------------------------------------------------------------------
Victoria's Secret Direct                                     962         956          894         1%          7%
- --------------------------------------------------------------------------------------------------------------------
TOTAL NET SALES                                           $5,117      $4,632       $3,989        10%         16%
- --------------------------------------------------------------------------------------------------------------------
COMPARABLE STORE SALES
Victoria's Secret Stores                                       5%         12%           4%
Bath & Body Works                                              1%         11%           7%
- --------------------------------------------------------------------------------------------------------------------
TOTAL COMPARABLE STORE SALES INCREASE                          4%         12%           5%
- --------------------------------------------------------------------------------------------------------------------
STORE DATA
Retail sales increase due to net
   new and remodeled stores
Victoria's Secret Stores                                       3%          5%           3%
Bath & Body Works                                             14%         11%          12%
Retail sales per average selling square foot
Victoria's Secret Stores                                  $  572      $  553       $  500         3%         11%
Bath & Body Works                                         $  646      $  668       $  649        (3%)         3%
Retail sales per average store (Thousands)
Victoria's Secret Stores                                  $2,523      $2,460       $2,245         3%         10%
Bath & Body Works                                         $1,349      $1,345       $1,265        --           6%
Average store size at end of year (Selling square feet)
Victoria's Secret Stores                                   4,391       4,438        4,466        (1%)        (1%)
Bath & Body Works                                          2,122       2,051        1,972         3%          4%
Selling square feet at end of year (Thousands)
Victoria's Secret Stores                                   4,207       3,976        3,702         6%          7%
Bath & Body Works                                          3,039       2,490        2,092        22%         19%

NUMBER OF STORES
Beginning of year                                          2,110       1,890        1,710
Opened                                                       305         241          201
Closed                                                       (25)        (21)         (21)
- --------------------------------------------------------------------------------------------------------------------
END OF YEAR                                                2,390       2,110        1,890        13%         12%
- --------------------------------------------------------------------------------------------------------------------

* FIFTY-THREE-WEEK FISCAL YEAR.

NM--NOT MEANINGFUL
                                                                          27


NET SALES
FOURTH QUARTER
Net sales for the fourteen-week fourth quarter of 2000 increased 5% to $1.938
billion from $1.838 billion for the thirteen-week fourth quarter of 1999. The
increase was due to the net addition of 280 new stores in fiscal year 2000 and
the inclusion of sales for the fourteenth week. These factors were partially
offset by a 3% decrease in comparable store sales and a 9% decrease in sales at
Victoria's Secret Direct. These declines were the result of a difficult holiday
season and a promotional retail environment. Net sales for the fourth quarter of
1999 increased by 18% to $1.838 billion from $1.558 billion in 1998. The
increase was due to an 11% increase in comparable store sales, the net addition
of 220 new stores in fiscal year 1999 and a 14% increase in sales at Victoria's
Secret Direct.

FULL YEAR
Net sales for the fifty-three-week fiscal year 2000 increased 10% to $5.117
billion from $4.632 billion for the fifty-two-week fiscal year 1999. The
increase was primarily due to the net addition of 280 new stores, a 4% increase
in comparable store sales and slight increases from Victoria's Secret Direct and
from the inclusion of sales for the fifty-third week. Net sales for 1999
increased 16% to $4.632 billion from $3.989 billion in 1998. The increase was
due to a 12% increase in comparable store sales, the net addition of 220 new
stores and a 7% increase in sales at Victoria's Secret Direct.

Retail sales for the fifty-three-week fiscal year 2000 increased 13% to $4.155
billion from $3.676 billion for the fifty-two-week fiscal year 1999. Bath & Body
Works' sales increase of 17% was attributable to the net addition of 218 new
stores (549,000 selling square feet) and a 1% increase in comparable store
sales. Victoria's Secret Stores' sales increase of 10% was attributable to a 5%
increase in comparable store sales and the net addition of 62 new stores
(231,000 selling square feet). Victoria's Secret Stores' spring season was
particularly strong, driven by successful product launches including Body By
Victoria and Victoria's Secret Beauty's Dream Angel "Halo" line. These product
launches were supported by national media campaigns and international publicity
surrounding the Cannes fashion show.

In 1999, retail sales increased 19% to $3.676 billion from $3.095 billion in
1998. Bath & Body Works' sales increase of 22% was attributable to the net
addition of 153 new stores (398,000 selling square feet), as well as an 11%
increase in comparable store sales. Bath & Body Works' sales increase was
primarily driven by a steady flow of innovative new product offerings.
Victoria's Secret Stores' sales increase of 17% was attributable to a 12%
increase in comparable store sales driven by innovative product introductions,
new business opportunities such as Victoria's Secret Beauty, an increased
inventory position in foundation basics and major product launches supported by
national media. The remaining increase came from the net addition of 67 new
stores (274,000 selling square feet).

Sales at Victoria's Secret Direct for the fifty-three-week fiscal year 2000
increased 1% to $962.4 million from the fifty-two-week fiscal year 1999. In
1999, sales at Victoria's Secret Direct increased 7% to $956.0 million. The
sales increase in 1999 was attributable to an increased response rate, higher
sales per catalog page and increased e-commerce sales through
www.VictoriasSecret.com.

GROSS INCOME
FOURTH QUARTER
For the fourth quarter of 2000, the gross income rate (expressed as a percentage
of net sales) decreased to 42.0% from 45.2% for the same period in 1999. The
rate decrease was principally due to an increase in the buying and occupancy
expense rate and a decrease in the merchandise margin rate. The buying and
occupancy expense rate increase was primarily due to the inability to achieve
leverage as comparable store sales decreased 3%, increases in overall
store-related expenses and the continuing expansion of Bath & Body Works' stores
into highly profitable non-mall locations, which typically have higher occupancy
costs as a percentage of sales. The merchandise margin rate decrease was driven
by significant markdowns to clear slower selling inventory assortments during
and after a highly promotional holiday season.

For the fourth quarter of 1999, the gross income rate decreased slightly to
45.2% from 45.7% for the same period in 1998. The rate decline was due to a
decrease in the merchandise margin rate attributable to higher markdowns nearly
offset by buying and occupancy expense leverage resulting from an 11% increase
in comparable store sales.

FULL YEAR
In 2000, the gross income rate decreased to 39.9% from 40.9% in 1999. The rate
decrease was principally due to a decrease in the merchandise margin rate and a
slight increase in the buying and occupancy expense rate. The merchandise margin
rate decrease was driven by significant markdowns, principally in the fourth
quarter. The buying and occupancy expense rate increase was due to the
continuing expansion of Bath & Body Works' stores into highly profitable
non-mall locations, which typically have higher occupancy costs as a percentage
of sales, and the inability to leverage expenses in large part due to the 3%
decrease in comparable store sales in the fourth quarter.

In 1999, the gross income rate increased to 40.9% from 40.2% in 1998. The rate
increase was primarily attributable to a decrease in the buying and occupancy
expense rate as the businesses leveraged a 12% increase in comparable store
sales. A slight decrease in the merchandise margin rate was primarily
attributable to higher markdowns at Victoria's Secret Direct.

GENERAL, ADMINISTRATIVE AND
STORE OPERATING EXPENSES
FOURTH QUARTER
For the fourth quarter of 2000, the general, administrative and store operating
expense rate (expressed as a percentage of net sales) increased to 22.0% from
19.6% for the same period in 1999. The rate increase was primarily driven by
increased investments in store selling at Bath & Body Works and Victoria's
Secret Stores in anticipation of the normal holiday sales peak. These
investments were not fully leveraged due to a 3% decrease in comparable store
sales.

For the fourth quarter of 1999, the general, administrative and store operating
expense rate decreased to 19.6% from 20.6% for the same period in 1998. The rate
decrease was primarily attributable to expense leverage resulting from an 11%
comparable stores sales increase.

FULL YEAR
In 2000, the general, administrative and store operating expense rate increased
to 25.2% from 23.8% in 1999. The rate increase was primarily due to increased
investments in store selling at Bath & Body Works and Victoria's Secret Stores.
These investments were not fully leveraged in large part due to the difficult
fourth quarter that resulted in a full year comparable store sales increase of
only 4%. Additionally, Bath & Body Works has continued to expand into highly
profitable non-mall locations, which typically have higher payroll costs as a
percentage of sales.

In 1999, the general, administrative and store operating expense rate increased
to 23.8% from 23.4% in 1998. The rate increase was primarily due to increased
national advertising by Victoria's Secret and additional store staffing to
support product extensions and new initiatives at Victoria's Secret Stores.

SPECIAL AND NONRECURRING CHARGE
During the fourth quarter of 2000, the Company recorded a $9.9 million special
and nonrecurring charge to close Bath & Body Works' United Kingdom stores. All
nine stores are scheduled to close during the first quarter of 2001. The charge
consisted of store and other asset write-offs of $4.9 million and accruals for
lease termination and other costs of $5.0 million.

OPERATING INCOME
FOURTH QUARTER
For the fourth quarter of 2000, the operating income rate (expressed as a
percentage of net sales) decreased to 19.5% from 25.6% for the same period in
1999. The rate decrease was due to a 3.2% decrease in the gross income rate, a
2.4% increase in the general, administrative and store operating expense rate
and the special and nonrecurring charge in 2000.

For the fourth quarter of 1999, the operating income rate increased to 25.6%
from 25.1% for the same period in 1998. The rate increase was due to a 1.0%
decrease in the general, administrative and store operating expense rate, which
more than offset the 0.5% decrease in the gross income rate.

FULL YEAR
In 2000, the operating income rate decreased to 14.5% from 17.1% in 1999. The
rate decrease was due to a 1.0% decrease in the gross income rate, a 1.4%
increase in the general, administrative and store operating expense rate and the
special and nonrecurring charge in 2000.

In 1999, the operating income rate increased to 17.1% from 16.8% in 1998. The
rate increase was due to a 0.7% increase in the gross income rate, which more
than offset the 0.4% increase in the general, administrative and store operating
expense rate.

INTEREST EXPENSE
In 2000, the Company incurred $8.8 million and $27.5 million in interest expense
for the fourth quarter and year, compared to $7.3 million and $32.0 million in
1999 for the same periods. Interest expense relates to the term debt and the
payable to The Limited (see Note 9 to the Consolidated Financial Statements).
The fourth quarter increase in interest expense was due to an increase in the
Company's interest bearing payable to The Limited primarily as a result of stock
repurchases during 2000. The full year decrease in interest expense is due to a
lower average interest bearing payable to The Limited during 2000 versus 1999
and the repayment of $100 million in higher rate term debt in August 1999.

28



FINANCIAL CONDITION

LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities and borrowings from The Limited provide
the resources to support current operations, projected growth, seasonal funding
requirements and capital expenditures.

A SUMMARY OF THE COMPANY'S WORKING CAPITAL
POSITION AND CAPITALIZATION FOLLOWS:




(Millions)                      2000    1999     1998
- -----------------------------------------------------
                                        
Cash provided by
   operating activities         $555    $504     $510
Working capital                 $122    $125     $419

CAPITALIZATION
Long-term debt                  $100    $100     $250
Shareholders' equity             665     545      609
- -----------------------------------------------------
TOTAL CAPITALIZATION            $765    $645     $859
- -----------------------------------------------------



THE COMPANY CONSIDERS THE FOLLOWING TO BE RELEVANT
MEASURES OF LIQUIDITY AND CAPITAL RESOURCES:




                                 2000    1999    1998
- -----------------------------------------------------
                                         
Debt-to-capitalization ratio
   (long-term debt divided by
   total capitalization)          13%     16%     29%

Cash flow to capital investment
   (net cash provided by
   operating activities divided
   by capital expenditures)      226%    245%    419%



The Company's operations are seasonal in nature and consist of two principal
selling seasons: spring (the first and second quarters) and fall (the third and
fourth quarters). The fourth quarter, including the holiday season, has
accounted for approximately 40% of net sales in each of the last three years.
Accordingly, cash requirements are highest in the third quarter as the Company's
inventory builds in anticipation of the holiday season, which in turn produces a
substantial portion of the Company's operating cash flow for the year.

OPERATING ACTIVITIES
Net cash provided by operating activities totaled $555 million, $504 million and
$510 million for 2000, 1999 and 1998. The primary differences in cash provided
by operating activities were due to changes in inventories, accounts payable,
accrued expenses and income taxes.

INVESTING ACTIVITIES
Investing activities were primarily capital expenditures for new and remodeled
stores and other strategic brand investments.

FINANCING ACTIVITIES
Financing activities in 2000 included cash dividend payments totaling $0.28 per
share or $138 million for the year. The Company repurchased 8.8 million shares
of its common stock for $198 million, of which 7.4 million shares were
repurchased on a proportionate basis from The Limited for $167 million.

The repurchases did not change The Limited's 84% ownership interest in the
Company. The Company also repaid $150 million of long-term debt and incurred
increased borrowings of $89 million through The Limited's intercompany cash
management account (see Note 9 to the Consolidated Financial Statements).
Noncash financing activities in 2000 included a two-for-one stock split in the
form of a stock dividend distributed on May 30, 2000 to shareholders of record
on May 12, 2000. Shareholders' equity reflects the reclassification of an amount
equal to the par value of the increase in issued common shares ($3 million) from
paid-in capital to common stock.

Financing activities in 1999 included cash dividend payments totaling $0.27 per
share or $137 million for the year. The Company completed a $500 million stock
repurchase program that began in 1998 through the repurchase of 20.4 million
shares of its common stock for $404 million, of which 17.2 million shares were
repurchased on a proportionate basis from The Limited for $342 million. The
Company also repaid $100 million of long-term debt.

Financing activities in 1998 included cash dividend payments totaling $0.27 per
share or $140 million for the year. In January 1999, the Company initiated a
$500 million stock repurchase program and repurchased 5.5 million shares of its
common stock for $96 million, of which 4.6 million shares were repurchased on a
proportionate basis from The Limited for $81 million. Under a second repurchase
program completed in August 1998, the Company repurchased 9.4 million shares of
its common stock from its public shareholders for $106 million. These
repurchased shares were specifically reserved to cover shares needed for
employee benefit plans.

CAPITAL EXPENDITURES
Capital expenditures amounted to $245 million, $206 million and $122 million for
2000, 1999 and 1998, of which $215 million, $136 million and $87 million were
for new stores and for the remodeling of and improvements to existing stores.
Remaining capital expenditures are primarily related to information technology
and investments in intellectual property assets.

The Company added 780,000 selling square feet in 2000, which represented an
increase of 12% over 1999. The increase in selling square feet resulted from the
net addition of 280 new stores and the expansion of 47 stores.

The Company anticipates spending $280 to $310 million in 2001 for capital
expenditures, of which $250 to $275 million will be for new stores and for the
remodeling of and improvements to existing stores. The Company expects that 2001
capital expenditures will be principally funded by net cash provided by
operating activities.

The Company intends to add approximately 900,000 selling square feet in 2001,
which will represent a 13% increase over year-end 2000. It is anticipated that
the increase will result from the addition of approximately 280 new stores and
the expansion of 59 stores, partially offset by the closing of approximately 15
stores.

A SUMMARY OF STORES AND SELLING SQUARE FEET BY BUSINESS FOLLOWS:



                                                       End of Year                        Change from Prior Year
                                   --------------------------------------------        ---------------------------
                                   Plan 2001             2000              1999        2001-2000         2000-1999
- -------------------------------------------------------------------------------------------------------------------
                                                                                         
Victoria's Secret Stores
Stores                                 1,019              958               896            61                62
Selling square feet (000s)             4,610            4,207             3,976           403               231
Bath & Body Works
Stores                                 1,635            1,432             1,214           203               218
Selling square feet (000s)             3,544            3,039             2,490           505               549
- -------------------------------------------------------------------------------------------------------------------
TOTAL STORES                           2,654            2,390             2,110           264               280
TOTAL SELLING SQUARE FEET (000s)       8,154            7,246             6,466           908               780
- -------------------------------------------------------------------------------------------------------------------



RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities," subsequently amended and
clarified by SFAS No. 138, is effective for the Company's 2001 fiscal year. It
requires that derivative instruments be recorded at fair value and that changes
in their fair value be recognized in current earnings unless specific hedging
criteria are met. The Company's use of derivatives is limited, and the adoption
of SFAS No. 133 will not have a material impact on its consolidated financial
statements.

Emerging Issues Task Force ("EITF") Issue No. 00-14, "Accounting for Certain
Sales Incentives," will be effective in the second quarter of 2001 and addresses
the accounting and classification of various sales incentives. The Company has
determined that adopting the provisions of the EITF Issue will not have a
material impact on its consolidated financial statements.

MARKET RISK
Management believes the Company's exposure to interest rate and market risk
associated with financial instruments (such as investments and borrowings) is
not material.

IMPACT OF INFLATION
The Company's results of operations and financial condition are presented based
on historical cost. While it is difficult to accurately measure the impact of
inflation due to the imprecise nature of the estimates required, the Company
believes the effects of inflation, if any, on the results of operations and
financial condition have been minor.

SAFE HARBOR STATEMENT UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

The Company cautions that any forward-looking statements (as such term is
defined in the Private Securities Litigation Reform Act of 1995) contained in
this Report or made by management of the Company involve risks and uncertainties
and are subject to change based on various important factors, many of which may
be beyond the Company's control. Accordingly, the Company's future performance
and financial results may differ materially from those expressed or implied in
any such forward-looking statements. The following factors, among others, in
some cases have affected and in the future could affect the Company's financial
performance and actual results and could cause actual results for 2001 and
beyond to differ materially from those expressed or implied in any
forward-looking statements included in this Report or otherwise made by
management: changes in consumer spending patterns, consumer preferences and
overall economic conditions, the impact of competition and pricing, changes in
weather patterns, political stability, currency and exchange risks and changes
in existing or potential duties, tariffs or quotas, postal rate increases and
charges, paper and printing costs, the availability of suitable store locations
at appropriate terms, the ability to develop new merchandise and the ability to
hire and train associates. The Company does not undertake to publicly update or
revise its forward-looking statements even if experience or future changes make
it clear that any projected results expressed or implied therein will not be
realized.

                                                                            29



CONSOLIDATED STATEMENTS OF INCOME




(Thousands except per share amounts)                         2000             1999            1998
- -------------------------------------------------------------------------------------------------------
                                                                                
Net sales                                                $ 5,117,199      $ 4,632,029     $ 3,988,594
Costs of goods sold, buying and occupancy                 (3,074,708)      (2,737,291)     (2,382,546)
- -------------------------------------------------------------------------------------------------------
Gross income                                               2,042,491        1,894,738       1,606,048
General, administrative and store operating expenses      (1,288,135)      (1,101,222)       (935,199)
Special and nonrecurring charge                               (9,900)              --              --
- -------------------------------------------------------------------------------------------------------
Operating income                                             744,456          793,516         670,849
Interest expense                                             (27,549)         (32,017)        (30,050)
Other income, net                                              3,559            3,405          16,400
- -------------------------------------------------------------------------------------------------------
Income before income taxes                                   720,466          764,904         657,199
Provision for income taxes                                   288,000          306,000         263,000
- -------------------------------------------------------------------------------------------------------
NET INCOME                                               $   432,466      $   458,904     $   394,199
- -------------------------------------------------------------------------------------------------------
NET INCOME PER SHARE
Basic                                                    $      0.88      $      0.92     $      0.75
Diluted                                                  $      0.87      $      0.90     $      0.74
- -------------------------------------------------------------------------------------------------------


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.


CONSOLIDATED BALANCE SHEETS




(Thousands)                                      February 3, 2001           January 29, 2000
- -------------------------------------------------------------------------------------------------------
                                                                     

ASSETS

CURRENT ASSETS
Cash and equivalents                              $    8,923                 $   76,373
Accounts receivable                                   13,974                     18,135
Inventories                                          632,389                    583,469
Store supplies                                        46,220                     42,103
Other                                                 56,205                     91,273
- -------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS                                 757,711                    811,353
Property and equipment, net                          560,451                    449,043
Other assets                                         139,186                    124,036
- -------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                      $1,457,348                 $1,384,432
- -------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable                                  $  113,080                 $  102,446
Current portion of long-term debt                         --                    150,000
Accrued expenses                                     288,985                    241,673
Payable to The Limited, Inc.                         113,063                     23,741
Income taxes                                         120,825                    168,286
- -------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES                            635,953                    686,146
Long-term debt                                       100,000                    100,000
Deferred income taxes                                     --                        816
Other long-term liabilities                           56,067                     52,739

SHAREHOLDERS' EQUITY
Common stock                                           5,318                      2,659
Paid-in capital                                    1,215,278                  1,217,793
Retained earnings (deficit)                          181,100                   (113,067)
- -------------------------------------------------------------------------------------------------------
                                                   1,401,696                  1,107,385
Less: treasury stock, at average cost               (736,368)                  (562,654)
- -------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY                           665,328                    544,731
- -------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY        $1,457,348                 $1,384,432
- -------------------------------------------------------------------------------------------------------


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

30



CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY



                                             Common Stock
                                       ----------------------                 Retained         Treasury           Total
                                          Shares       Par       Paid-In      Earnings        Stock, at   Shareholders'
(Thousands)                          Outstanding     Value       Capital      (Deficit)    Average Cost          Equity
- -----------------------------------------------------------------------------------------------------------------------
                                                                                      
BALANCE, JANUARY 31, 1998               530,454     $2,527    $  674,620     $(144,365)    $  (1,887)    $   530,895
Net income                                 --         --            --         394,199          --           394,199
Cash dividends                             --         --            --        (140,338)         --          (140,338)
Repurchase of common stock              (14,938)      --            --            --        (201,606)       (201,606)
Exercise of stock options and other         840       --          (2,229)         --          27,822          25,593
- -----------------------------------------------------------------------------------------------------------------------
BALANCE, JANUARY 30, 1999               516,356     $2,527    $  672,391     $ 109,496     $(175,671)    $   608,743
Net income                                 --         --            --         458,904          --           458,904
Cash dividends                             --         --            --        (136,501)         --          (136,501)
Stock dividend                             --          132       544,834      (544,966)         --              --
Repurchase of common stock              (20,442)      --            --            --        (404,410)       (404,410)
Exercise of stock options and other       1,820       --             568          --          17,427          17,995
- -----------------------------------------------------------------------------------------------------------------------
BALANCE, JANUARY 29, 2000               497,734     $2,659    $1,217,793     $(113,067)    $(562,654)    $   544,731
Net income                                 --         --            --         432,466          --           432,466
Cash dividends                             --         --            --        (138,299)         --          (138,299)
Two-for-one stock split                    --        2,659        (2,659)         --            --              --
Repurchase of common stock               (8,789)      --            --            --        (197,878)       (197,878)
Exercise of stock options and other       1,806       --             144          --          24,164          24,308
- -----------------------------------------------------------------------------------------------------------------------
BALANCE, FEBRUARY 3, 2001               490,751     $5,318    $1,215,278     $ 181,100     $(736,368)    $   665,328
- -----------------------------------------------------------------------------------------------------------------------


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.


CONSOLIDATED STATEMENTS OF CASH FLOWS




(Thousands)                                                                  2000             1999              1998
- -----------------------------------------------------------------------------------------------------------------------
                                                                                                   
OPERATING ACTIVITIES
Net income                                                              $ 432,466          $ 458,904         $ 394,199
- -----------------------------------------------------------------------------------------------------------------------
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED BY (USED FOR) OPERATING ACTIVITIES
Depreciation and amortization                                             122,172            104,625           101,221
Special and nonrecurring charge, net of income taxes                        5,900                 --                --
- -----------------------------------------------------------------------------------------------------------------------
CHANGE IN ASSETS AND LIABILITIES
Accounts receivable                                                         4,161             (2,508)           19,012
Inventories                                                               (48,920)          (103,573)          (62,193)
Accounts payable and accrued expenses                                      50,946             24,819            (9,863)
Income taxes                                                              (35,642)            12,787            30,348
Other assets and liabilities                                               23,801              8,450            36,947
- -----------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES                                 554,884            503,504           509,671
- -----------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Capital expenditures                                                     (245,127)          (205,516)         (121,543)
- -----------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Dividends paid                                                           (138,299)          (136,501)         (140,338)
Repayment of long-term debt                                              (150,000)          (100,000)               --
Repurchase of common stock                                               (197,878)          (404,410)         (201,606)
Net increase in payable to The Limited, Inc.                               89,322             17,881            18,317
Proceeds from exercise of stock options and other                          19,648             13,641            14,553
- -----------------------------------------------------------------------------------------------------------------------
NET CASH USED FOR FINANCING ACTIVITIES                                   (377,207)          (609,389)         (309,074)
- -----------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS                           (67,450)          (311,401)           79,054
Cash and equivalents, beginning of year                                    76,373            387,774           308,720
- -----------------------------------------------------------------------------------------------------------------------
CASH AND EQUIVALENTS, END OF YEAR                                       $   8,923          $  76,373         $ 387,774
- -----------------------------------------------------------------------------------------------------------------------


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.

                                                                          31


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION
Intimate Brands, Inc. (the "Company") includes specialty retail stores and
direct response (catalog and e-commerce) businesses, which offer women's
intimate and other apparel, personal care products and accessories. The
Company consists of Victoria's Secret Stores, Victoria's Secret Direct, and
Bath & Body Works. The Limited, Inc. ("The Limited") owns approximately 84%
of the outstanding common stock of the Company, which initiated public
ownership on October 24, 1995.

The consolidated financial statements include the accounts of the Company and
its subsidiaries. All significant intercompany balances and transactions have
been eliminated in consolidation.

Investments in unconsolidated affiliates over which the Company exercises
significant influence but does not have control are accounted for using the
equity method. The Company's share of the net income or loss of those
unconsolidated affiliates is included in other income (expense).

FISCAL YEAR
The Company's fiscal year ends on the Saturday closest to January 31. Fiscal
years are designated in the financial statements and notes by the calendar
year in which the fiscal year commences. The results for fiscal year 2000
represent the fifty-three-week period ended February 3, 2001 and results for
fiscal years 1999 and 1998 represent the fifty-two-week periods ended January
29, 2000 and January 30, 1999.

CASH AND EQUIVALENTS
Cash and equivalents include amounts on deposit with financial institutions
and money market investments with original maturities of less than 90 days.

INVENTORIES
Inventories are principally valued at the lower of average cost or market, on
a first-in first-out basis, using the retail method.

STORE SUPPLIES
The initial shipment of selling-related supplies (including, but not limited
to, hangers, signage, security tags, and packaging) is capitalized at the
store opening date. In lieu of amortizing the initial balance, subsequent
shipments are expensed, except for new merchandise presentation programs,
which are capitalized. Store supplies are periodically adjusted as
appropriate for changes in actual quantities or costs.

DIRECT RESPONSE ADVERTISING
Direct response advertising relates primarily to the production and
distribution of the Company's catalogs and is amortized over the expected
future revenue stream, which is principally three months from the date
catalogs are mailed. All other advertising costs are expensed at the time the
promotion first appears in media or in the store. Catalog and advertising
costs amounted to $353 million, $316 million and $294 million in 2000, 1999
and 1998. At February 3, 2001 and January 29, 2000, $16.9 million and $23.3
million of unamortized catalog costs were included in other current assets.

LONG-LIVED ASSETS
Depreciation and amortization of property and equipment are computed for
financial reporting purposes on a straight-line basis, using service lives
ranging principally from 10 to 15 years for building and leasehold
improvements, and 3 to 10 years for other property and equipment. The cost of
assets sold or retired and the related accumulated depreciation or
amortization are removed from the accounts with any resulting gain or loss
included in net income. Maintenance and repairs are charged to expense as
incurred. Major renewals and betterments that extend service lives are
capitalized.

Goodwill is amortized on a straight-line basis over 30 years. The cost of
intellectual property assets is amortized based on the sell-through of the
related products, over the shorter of the term of the license agreement or
the estimated useful life of the asset, not to exceed 10 years.

Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that full recoverability is questionable. Factors used
in the valuation include, but are not limited to, management's plans for
future operations, brand initiatives, recent operating results and projected
cash flows.

INCOME TAXES
The Company accounts for income taxes using the asset and liability method.
Under this method, deferred tax assets and liabilities are recognized based
on the difference between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax assets
and liabilities are measured using enacted tax rates in effect in the years
when those temporary differences are expected to reverse. The effect on
deferred taxes of a change in tax rates is recognized in income in the period
that includes the enactment date.

SHAREHOLDERS' EQUITY
On May 2, 2000, the Company declared a two-for-one stock split ("stock
split") in the form of a stock dividend distributed on May 30, 2000 to
shareholders of record on May 12, 2000. Shareholders' equity reflects the
reclassification of an amount equal to the par value of the increase in
issued common shares ($2.7 million) from paid-in capital to common stock. All
share and per share data throughout this report has been restated to reflect
the stock split.

At February 3, 2001, there were 550 million of $0.01 par value Class A shares
and 550 million of $0.01 par value Class B shares authorized, of which 79.1
million Class A shares and 411.6 million Class B shares were issued and
outstanding, net of 12.0 million Class A shares and 29.4 million Class B
shares held in treasury. At January 29, 2000, there were 78.7 million Class A
shares and 419.0 million Class B shares issued and outstanding, net of 12.0
million Class A shares and 22.0 million Class B shares held in treasury. In
addition, there were 55 million of $0.01 par value preferred shares
authorized, none of which have been issued.

Holders of Class A common stock generally have identical rights to holders of
Class B common stock, except that holders of Class A common stock are
entitled to one vote per share while holders of Class B common stock are
entitled to three votes per share on all matters submitted to a vote of
shareholders. Each share of Class B common stock is convertible while held by
The Limited or any of its subsidiaries into one share of Class A common stock.

In 2000, the Company repurchased 8.8 million shares of its common stock for
$197.9 million, of which 7.4 million shares were repurchased on a
proportionate basis from The Limited for $166.5 million. The repurchases did
not change The Limited's 84% ownership interest in the Company.

In 1999, the Company completed a $500 million stock repurchase program that
began in 1998 through the repurchase of 20.4 million shares of its common
stock for $404.4 million, of which 17.2 million shares were repurchased on a
proportionate basis from The Limited for $341.8 million. Also in 1999, the
Company declared a 5% stock dividend to both The Limited and public
shareholders of record as of July 2, 1999 which resulted in the issuance of
23.6 million shares of common stock. Accordingly, common stock, paid-in
capital and retained earnings were adjusted based on the fair market value of
the additional shares issued.

In 1998, the Company initiated the $500 million stock repurchase program and
repurchased 5.5 million shares of its common stock for $95.6 million, of
which 4.6 million shares were repurchased on a proportionate basis from The
Limited for $80.7 million. Under a second repurchase program completed in
August 1998, the Company repurchased 9.4 million shares of its common stock
from its public shareholders for $106 million. These repurchased shares were
specifically reserved to cover shares needed for employee benefit plans.

REVENUE RECOGNITION
The Company recognizes sales upon customer receipt of the merchandise.
Shipping and handling revenues are included in net sales and the related
costs are included in costs of goods sold, buying and occupancy. Revenue for
gift certificate sales and store credits is recognized at redemption. A
reserve is provided for projected merchandise returns based on prior
experience.

The Company's revenue recognition policy is consistent with the guidance
contained in the Securities and Exchange Commission's Staff Accounting
Bulletin No. 101, "Revenue Recognition in Financial Statements," the adoption
of which did not have a material effect on the consolidated financial
statements.

EARNINGS PER SHARE
Net income per share is computed in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 128, "Earnings Per Share." Earnings per
basic share is computed based upon the weighted average number of outstanding
common shares. Earnings per diluted share includes the weighted average
effect of dilutive options and restricted stock on the weighted average
shares outstanding.

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:




(Thousands)                    2000       1999       1998
- -----------------------------------------------------------
                                         
Common shares issued         532,004    531,622    530,670
Treasury shares              (38,767)   (31,854)    (4,558)
- -----------------------------------------------------------
Basic shares                 493,237    499,768    526,112
Effect of dilutive options
   and restricted stock        6,252      7,948      4,008
- -----------------------------------------------------------
DILUTED SHARES               499,489    507,716    530,120
- -----------------------------------------------------------


The computation of earnings per diluted share excludes options to purchase
2.4 million, 0.3 million and 2.5 million shares of common stock in 2000, 1999
and 1998, because the options' exercise price was greater than the average
market price of the common shares during the year.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Because actual results may differ from those estimates,
the Company revises its estimates and assumptions as new information becomes
available.

32



RECLASSIFICATIONS
In the fourth quarter of 2000, the Company adopted Emerging Issues Task Force
("EITF") Issue No. 00-10, "Accounting for Shipping and Handling Fees and
Costs." As a result, the Company reclassified shipping and handling revenues
from general, administrative and store operating expenses to net sales. The
related shipping costs were reclassified from general, administrative and
store operating expenses to costs of goods sold, buying and occupancy.
Additionally, the Company has classified discounts on sales to associates as
a reduction to net sales. Such discounts were previously recorded in general,
administrative and store operating expenses. These and certain other prior
year amounts have been reclassified to conform to the current year
presentation.

2. SPECIAL AND NONRECURRING CHARGE

During the fourth quarter of 2000, the Company recorded a $9.9 million
special and nonrecurring charge to close Bath & Body Works' United Kingdom
stores. All nine stores are scheduled to close during the first quarter of
2001. The charge consisted of store and other asset write-offs of $4.9
million and accruals for lease termination and other costs of $5.0 million.

3. PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, AT COST, CONSISTED OF:




(Thousands)                           2000       1999
- --------------------------------------------------------
                                          
Furniture, fixtures and equipment  $  871,052   $757,339
Land, building improvements
   and leaseholds                     263,091    179,273
- --------------------------------------------------------
                                    1,134,143    936,612
Less: accumulated depreciation
   and amortization                   573,692    487,569
- --------------------------------------------------------
PROPERTY AND EQUIPMENT, NET        $  560,451   $449,043
- --------------------------------------------------------


4. LEASED FACILITIES AND COMMITMENTS

Annual store rent consists of a fixed minimum amount, and/or contingent rent
based upon a percentage of sales exceeding a stipulated amount. Store lease
terms generally require additional payments covering taxes, common area costs
and certain other expenses.

For leases that contain predetermined fixed escalations of the minimum rentals
and/or rent abatements, the Company recognizes the related rental expense on a
straight-line basis and records the difference between the recognized rental
expense and amounts payable under the leases as deferred lease credits, which
are included in other long-term liabilities. At February 3, 2001 and January 29,
2000, this liability amounted to $24.9 million and $28.1 million.

A SUMMARY OF RENT EXPENSE FOLLOWS:




(Thousands)               2000       1999        1998
- -----------------------------------------------------
                                   
STORE RENT
Fixed minimum         $196,814   $175,136    $159,368
Contingent              41,338     36,868      22,414
- -----------------------------------------------------
Total store rent       238,152    212,004     181,782
Buildings, equipment
   and other            26,803     24,921      18,092
- -----------------------------------------------------
TOTAL RENT EXPENSE    $264,955   $236,925    $199,874
- -----------------------------------------------------


Rent expense includes charges from The Limited and its subsidiaries for store,
office and distribution center space under formal agreements which approximate
market rates. At February 3, 2001, the Company was committed to noncancelable
leases with remaining terms of 1 to 20 years. A substantial portion of these
commitments consist of store leases with initial terms ranging from 10 to 20
years, with options to renew at varying terms, and offices and distribution
centers leased from The Limited with initial terms of 15 years.


A SUMMARY OF TOTAL MINIMUM RENT COMMITMENTS AND THE RELATED PARTY PORTION (SEE
NOTE 9) UNDER NONCANCELABLE LEASES FOLLOWS:





(Thousands)              Total            Related Party
- --------------------------------------------------------
                                     
2001                  $227,235               $ 31,120
2002                   220,543                 30,835
2003                   206,263                 30,063
2004                   190,132                 28,229
2005                   174,142                 26,563
Thereafter             572,039                131,109



5. OTHER ASSETS

OTHER ASSETS CONSISTED OF:




(Thousands)                          2000        1999
- ------------------------------------------------------------
                                          
Goodwill and other intangibles,
   net of accumulated
   amortization of
   $46,620 and $38,349               $100,232    $108,503
Other                                  38,954      15,533
- ------------------------------------------------------------
TOTAL OTHER ASSETS                   $139,186    $124,036
- ------------------------------------------------------------


6. ACCRUED EXPENSES

ACCRUED EXPENSES CONSISTED OF:




(Thousands)                          2000        1999
- --------------------------------------------------------
                                      
Compensation, payroll taxes
   and benefits                  $ 46,449    $ 50,338
Deferred revenue                   79,317      68,700
Taxes, other than income           20,308      14,210
Interest                            2,949       9,557
Other                             139,962      98,868
- --------------------------------------------------------
TOTAL ACCRUED EXPENSES           $288,985    $241,673
- --------------------------------------------------------


7. INCOME TAXES

THE PROVISION FOR INCOME TAXES CONSISTED OF:




(Thousands)               2000       1999        1998
- --------------------------------------------------------
                                   
CURRENTLY PAYABLE
Federal               $243,700   $255,600    $207,900
State                   36,500     52,900      42,400
- --------------------------------------------------------
                       280,200    308,500     250,300
- --------------------------------------------------------
DEFERRED
Federal                 (5,100)    (2,000)     10,200
State                   12,900       (500)      2,500
- --------------------------------------------------------
                         7,800     (2,500)     12,700
- --------------------------------------------------------
TOTAL PROVISION       $288,000   $306,000    $263,000



A RECONCILIATION BETWEEN THE STATUTORY FEDERAL INCOME TAX RATE AND THE
EFFECTIVE INCOME TAX RATE FOLLOWS:




                             2000       1999       1998
- -------------------------------------------------------
                                         
Federal income tax rate      35.0%      35.0%      35.0%
State income taxes, net of
   Federal income tax effect  4.5%       4.5%       4.5%
Other items, net              0.5%       0.5%       0.5%
- -------------------------------------------------------
TOTAL                        40.0%      40.0%      40.0%
- -------------------------------------------------------


Other assets included long-term deferred tax assets of $18.6 million at February
3, 2001. Other current assets included current deferred tax assets of $12.2
million and $39.4 million at February 3, 2001 and January 29, 2000. Current
income tax obligations are treated as having been settled through the
intercompany accounts as if the Company were filing its income tax returns on a
separate company basis. Such amounts were $320.5 million, $273.2 million and
$232.7 million in 2000, 1999 and 1998.



A SUMMARY OF THE EFFECT OF TEMPORARY DIFFERENCES THAT GIVE RISE TO DEFERRED
INCOME TAXES FOLLOWS:




(Thousands)                Assets    Liabilities    Total
- ---------------------------------------------------------
                                      
2000
Excess of tax over
   book depreciation             --  $(34,300)  $(34,300)
Special and
   nonrecurring charge      $ 5,700        --      5,700
State income taxes           12,900        --     12,900
Inventory                    17,500        --     17,500
Other, net                   29,000        --     29,000
- --------------------------------------------------------
TOTAL DEFERRED INCOME TAXES $65,100  $(34,300)  $ 30,800
- --------------------------------------------------------

1999
Excess of tax over
   book depreciation             --  $(30,300)  $(30,300)
Special and
   nonrecurring charge      $ 1,100        --      1,100
State income taxes           10,400        --     10,400
Inventory                    22,400        --     22,400
Other, net                   35,000        --     35,000
- ---------------------------------------------------------
TOTAL DEFERRED INCOME TAXES $68,900  $(30,300)  $ 38,600
- ---------------------------------------------------------


8. LONG-TERM DEBT

Long-term debt consists of notes which represent the Company's proportionate
share of certain long-term debt of The Limited. The interest rates and
maturities of the notes parallel those of the corresponding debt of The
Limited. The 7 1/2 % debentures are subject to early redemption beginning in
2003 at specified declining premiums concurrent with any prepayment of the
corresponding debt by The Limited.

LONG-TERM DEBT CONSISTED OF:




(Thousands)                                 2000      1999
- -------------------------------------------------------------
                                             
7 1/2% debentures due March 2023          $100,000   $100,000
9 1/8% notes due February 2001                  --    150,000
- -------------------------------------------------------------
                                           100,000    250,000
Less: current portion of long-term debt         --    150,000
- -------------------------------------------------------------
                                          $100,000   $100,000
- -------------------------------------------------------------


Interest paid to The Limited was $34.2 million, $36.1 million and $30.3 million
in 2000, 1999 and 1998.

9. RELATED PARTY TRANSACTIONS

Transactions between the Company and The Limited and its wholly-owned
subsidiaries commonly occur in the normal course of business and principally
consist of the following:

o Merchandise purchases      o Inbound and outbound
o Capital expenditures         transportation
o Real estate management     o Corporate services
  and leasing

Information with regard to these transactions is as follows:

Significant purchases are made from Mast, a wholly-owned subsidiary of The
Limited. Mast is a contract manufacturer and apparel importer. Prices are
negotiated on a competitive basis by merchants of the Company with Mast.

The Company's real estate operations, which include all aspects of lease
negotiations, ongoing dealings with landlords and developers, and lease and
utility payments, are handled centrally by the Property Services function of The
Limited. Specifically identifiable costs are charged directly to the Company.
All other service-related costs not specifically attributable are allocated to
the Company based on new and remodeled store construction projects and open
selling square feet in relation to the totals for The Limited.

The Company's store design and construction operations are coordinated centrally
by the Store Design and Construction function of The Limited. This function
facilitates the design

                                                                          33



and construction of new stores and remodels and, upon completion, transfers
store assets to the Company at actual cost. Store Design and Construction
expenses are charged to the Company based on new and remodeled store
construction projects and open selling square feet in relation to the totals
for The Limited.

The Company's inbound and outbound transportation operations, exclusive of
Victoria's Secret Direct (which maintains its own order fulfillment operation),
are managed centrally by Limited Logistics Services, a wholly-owned subsidiary
of The Limited. Inbound freight is charged to the Company based on actual
receipts while outbound freight is charged based on weight shipped.

The Limited provides certain services to the Company including, among other
things, aircraft, certain tax, treasury, legal, accounting and audit, corporate
development, risk management, associate benefit plan administration, human
resources and compensation, and government affairs services. Specifically
identifiable costs are charged directly to the Company. All other
service-related costs not specifically attributable to an operating business
have been allocated to the Company based upon a percentage of sales.

The Company participates in The Limited's centralized cash management system.
Under this system, cash received from the Company's operations is transferred to
The Limited's centralized cash accounts and cash disbursements are funded from
the centralized cash accounts on a daily basis. The intercompany account
represents an interest-earning asset or interest-bearing liability. Interest on
the intercompany account is calculated based on the Federal Reserve AA Composite
30-day rate. The amount of the intercompany payable to The Limited under these
agreements at February 3, 2001 and January 29, 2000 is $113.1 million and $23.7
million.

The Company is charged rent expense, common area maintenance charges and
utilities for stores shared with other consolidated subsidiaries of The Limited.
The charges are based on square footage and represent the proportionate share of
the underlying leases with third parties.

The Company is also charged rent expense and utilities at market rates for the
distribution center and home office space that it occupies according to formal
15-year lease agreements, which contain options to renew. The Company and The
Limited have entered into intercompany agreements which establish the provision
of services in accordance with the terms described above. The prices charged to
the Company for services provided under these agreements may be higher or lower
than prices that may be charged by third parties. It is not practicable to
estimate what these costs would be if The Limited were not providing these
services and the Company were required to purchase these services from outsiders
or develop internal expertise. Management believes the charges and allocations
described above are fair and reasonable.

THE FOLLOWING TABLE SUMMARIZES THE RELATED PARTY TRANSACTIONS BETWEEN THE
COMPANY AND THE LIMITED AND ITS WHOLLY-OWNED SUBSIDIARIES:




(Thousands)                             2000       1999       1998
- --------------------------------------------------------------------
                                                  
Mast purchases                        $621,724   $536,301   $383,193
Capital expenditures                   199,439    117,613     73,603
Distribution center, MIS and
   corporate transactions              148,732    123,874     92,819
Inbound and outbound freight            96,468     85,241     50,163
Store leases and other occupancy        31,707     30,322     26,223
Centrally managed benefits              47,126     53,961     44,064
Interest charges                        27,549     32,017     30,050
Interest income                          4,943      3,405     15,136



The Company has no arrangements with The Limited that result in the Company's
guarantee, pledge of assets or stock to provide collateral for The Limited's
debt obligations.

Proprietary credit cards accepted by the Company are offered to customers
through Alliance Data Systems, a 31%-owned venture of The Limited.

10. STOCK OPTIONS AND RESTRICTED STOCK

Under the Company's stock plan, associates may be granted up to 36.8 million
restricted shares or options to purchase the Company's common stock at the
market price on the date of grant. Options generally vest 25% per year over the
first four years of the grant. Of the options granted, 0.2 million in 2000, 2.4
million in 1999 and 0.4 million in 1998 had graduated vesting schedules of six
or more years. Options have a maximum term of ten years.

The Company measures compensation expense under APB Opinion No. 25, "Accounting
for Stock Issued to Employees," and no compensation expense has been recognized
for its stock option plans. In accordance with SFAS No. 123, "Accounting for
Stock-Based Compensation," the fair value of each option grant is estimated on
the date of grant using the Black-Scholes option-pricing model discussed below.
If compensation expense had been determined using the estimated fair value of
options under SFAS No. 123, the pro forma effects on net income and earnings per
share would have been a reduction of approximately $7.9 million or $0.02 per
share in 2000, $6.4 million or $0.01 per share in 1999 and $3.8 million or $0.01
per share in 1998.

The weighted average per share fair value of options granted ($5.14, $6.92 and
$3.50 during 2000, 1999 and 1998) was used to calculate the pro forma
compensation expense. The fair value was estimated using the Black-Scholes
option-pricing model with the following weighted average assumptions for 2000,
1999 and 1998: dividend yields of 2.4%, 1.8% and 2.8%; volatility of 40%, 36%
and 34%; risk-free interest rates of 5%, 7% and 5%; assumed forfeiture rates of
20%, 20% and 20%; and expected lives of 4.2 years, 5.2 years and 5.6 years.

RESTRICTED SHARES
Approximately 59,000, 340,000 and 850,000 restricted shares were granted in
2000, 1999 and 1998, with market values at date of grant of $1.1 million, $6.5
million and $12.9 million. Restricted stock grants generally vest either on a
graduated scale over four to six years or 100% at the end of a fixed vesting
period, principally five years.

The market value of restricted shares is being amortized as compensation expense
over the vesting period, generally four to six years. Compensation expense
related to restricted stock awards amounted to $5.5 million, $10.4 million and
$11.6 million in 2000, 1999 and 1998.

A SUMMARY OF STOCK OPTIONS OUTSTANDING FOR 2000 IS AS FOLLOWS:




                             Options Outstanding                                       Options Exercisable
- -------------------------------------------------------------------       -------------------------------
                                 Weighted Average          Weighted                             Weighted
   Range of           Number            Remaining           Average           Number             Average
Exercise Price   Outstanding     Contractual Life    Exercise Price      Exercisable      Exercise Price
- ---------------------------------------------------------------------------------------------------------
                                                                          
  $ 6 - $10        5,649,000                  6.1               $ 9        2,193,000                 $ 9
  $11 - $15        3,167,000                  7.2               $12        1,105,000                 $12
  $16 - $20        4,940,000                  8.5               $18        1,205,000                 $18
  $21 - $28          765,000                  8.7               $22          123,000                 $22
- ---------------------------------------------------------------------------------------------------------
  $ 6 - $28       14,521,000                  7.3               $13        4,626,000                 $12
- ---------------------------------------------------------------------------------------------------------



A SUMMARY OF STOCK OPTION ACTIVITY FOLLOWS:

1998



                                                    Weighted
                                   Number of         Average
                                      Shares    Option Price
- -------------------------------------------------------------
                                          
Outstanding at beginning of year    9,036,000       $ 8.88
Granted                             3,600,000        12.10
Exercised                            (574,000)        7.78
Canceled                             (378,000)        9.24
- ----------------------------------------------------------
OUTSTANDING AT END OF YEAR         11,684,000       $ 9.92
- ----------------------------------------------------------
OPTIONS EXERCISABLE AT END OF YEAR  1,852,000       $ 8.39
- ----------------------------------------------------------



1999



                                                  Weighted
                                   Number of       Average
                                      Shares  Option Price
- ----------------------------------------------------------
                                        
Outstanding at beginning of year   11,684,000       $ 9.92
Granted                             4,016,000        19.15
Exercised                          (1,006,000)        8.60
Canceled                             (262,000)       13.80
- ----------------------------------------------------------
OUTSTANDING AT END OF YEAR         14,432,000       $12.47
- ----------------------------------------------------------
OPTIONS EXERCISABLE AT END OF YEAR  2,836,000       $ 9.12
- ----------------------------------------------------------




2000



                                                  Weighted
                                   Number of       Average
                                      Shares  Option Price
- ----------------------------------------------------------
                                       
Outstanding at beginning of year  14,432,000       $12.47
Granted                            2,404,000        16.34
Exercised                         (1,492,000)        9.22
Canceled                            (823,000)       15.34
- ----------------------------------------------------------
OUTSTANDING AT END OF YEAR        14,521,000       $13.31
- ----------------------------------------------------------
OPTIONS EXERCISABLE AT END OF YEAR 4,626,000       $12.12
- ----------------------------------------------------------


11. RETIREMENT BENEFITS

The Company participates in a qualified defined contribution retirement plan
and a nonqualified supplemental retirement plan sponsored by The Limited.
Participation in the qualified plan is available to all associates who have
completed 1,000 or more hours of service with the Company during certain
12-month periods and attained the age of 21. Participation in the
nonqualified plan is subject to service and compensation requirements. The
Company's contributions to these plans are based on a percentage of the
associates' eligible annual compensation. The cost of these plans was $23.3
million, $21.3 million and $18.5 million in 2000, 1999 and 1998.

12. DERIVATIVES, FAIR VALUE OF FINANCIAL INSTRUMENTS AND CONCENTRATION OF CREDIT
RISK

The Company uses forward contracts on a limited basis, in order to reduce market
risk exposure associated with fluctuations in foreign currency rates on a small
volume of its merchandise purchases. These financial instruments are designated
at inception as hedges, and are monitored to determine their effectiveness as
hedges. The Company does not hold or issue financial instruments for trading
purposes.

34


FAIR VALUE
The carrying value of cash equivalents, accounts receivable, accounts payable,
current portion of long-term debt, and accrued expenses approximates fair value
because of their short maturity. The fair value of long-term debt is estimated
based on the quoted market prices for the same or similar issues or on the
current rates offered to The Limited for debt of the same remaining maturities.
The estimated fair value of the Company's long-term debt at February 3, 2001 and
January 29, 2000 was $96.8 million and $88.9 million compared to the carrying
value of $100 million in 2000 and 1999.

CONCENTRATION OF CREDIT RISK
The Company is subject to concentration of credit risk relating to cash and
equivalents. The Company maintains cash and equivalents with various major
financial institutions, as well as corporate commercial paper through the
Company's participation in The Limited's centralized cash management system.
The Limited monitors the relative credit standing of these financial
institutions and other entities and limits the amount of credit exposure with
any one entity. The Limited also monitors the creditworthiness of the
entities to which it grants credit terms in the normal course of business.

13. SEGMENT INFORMATION

The Company identifies operating segments based on a business's operating
characteristics. Reportable segments were determined based on similar
economic characteristics, the nature of products and services, and the method
of distribution. The retail segment includes the store-based operations of
Victoria's Secret Stores and Bath & Body Works. The VS Direct segment
consists of the Victoria's Secret Direct catalog and e-commerce operations.
Sales outside the United States were not significant.

In addition to its operating segments, management also focuses on Victoria's
Secret as a brand. Sales of the Victoria's Secret brand grew 7% in 2000 and 14%
in 1999 and totaled $3.301 billion in 2000, $3.078 billion in 1999 and $2.710
billion in 1998.


SEGMENT INFORMATION FOLLOWS:




(Thousands)                           Retail         VS Direct        Corporate     Reconciling Items     Total
- -----------------------------------------------------------------------------------------------------------------
                                                                                    
2000
Net sales                         $ 4,154,756        $962,443            --               --         $ 5,117,199
Depreciation and amortization         114,403           7,769            --               --             122,172
Operating income (loss)               824,978          51,883     $  (122,505)     $    (9,900)*         744,456
Total assets                        1,187,938         176,473          92,937             --           1,457,348
Capital expenditures                  240,818           4,309            --               --             245,127

1999
Net sales                         $ 3,676,036        $955,993            --               --         $ 4,632,029
Depreciation and amortization          95,869           8,756            --               --             104,625
Operating income (loss)               822,037          71,564     $  (100,085)            --             793,516
Total assets                        1,100,596         193,610          90,226             --           1,384,432
Capital expenditures                  203,387           2,119              10             --             205,516

1998
Net sales                         $ 3,094,462        $894,132            --               --         $ 3,988,594
Depreciation and amortization          92,665           8,556            --               --             101,221
Operating income (loss)               697,427          65,113     $   (91,691)            --             670,849
Total assets                          930,018         179,045         339,014             --           1,448,077
Capital expenditures                  110,148           9,580           1,815             --             121,543
- -----------------------------------------------------------------------------------------------------------------


*REPRESENTS THE SPECIAL AND NONRECURRING CHARGE OF $9.9 MILLION IN THE FOURTH
QUARTER OF 2000 TO CLOSE BATH & BODY WORKS' NINE STORES IN THE UNITED KINGDOM
(SEE NOTE 2).


14. QUARTERLY FINANCIAL DATA (UNAUDITED)

SUMMARIZED QUARTERLY FINANCIAL RESULTS FOLLOW:




(Thousands except per share amounts)        First           Second       Third            Fourth
- ---------------------------------------------------------------------------------------------------
                                                                          
2000 QUARTERS**
Net sales                                $1,044,742      $1,190,888      $944,035      $1,937,534
Gross income                                400,573         466,231       361,759         813,928
Net income                                   67,880          99,790        43,196         221,600*
Net income per share:
Basic                                    $     0.14      $     0.20      $   0.09      $     0.45*
Diluted                                        0.13            0.20          0.09            0.45*

1999 QUARTERS**
Net sales                                $  908,368      $1,053,529      $832,468      $1,837,664
Gross income                                337,312         407,813       319,491         830,122
Net income                                   52,706          88,903        38,443         278,852
Net income per share:
Basic                                    $     0.10      $     0.18      $   0.08      $     0.56
Diluted                                        0.10            0.18          0.08            0.55
- ----------------------------------------------------------------------------------------------------


* INCLUDES SPECIAL AND NONRECURRING CHARGE OF $9.9 MILLION IN THE FOURTH
QUARTER OF 2000 TO CLOSE BATH & BODY WORKS' NINE STORES IN THE UNITED KINGDOM
(SEE NOTE 2).

** NET SALES AND GROSS INCOME FOR 1999 AND THE FIRST THREE QUARTERS OF 2000
REFLECT THE RECLASSIFICATION OF SHIPPING AND HANDLING REVENUES AND COSTS AND
ASSOCIATE DISCOUNTS (SEE NOTE 1).





MARKET PRICE AND DIVIDEND INFORMATION
The Company's common stock is traded on the New York Stock Exchange ("IBI"). On
February 3, 2001, there were approximately 4,000 shareholders of record.
However, when including active associates who participate in the Company's stock
purchase plan, associates who own shares through Company sponsored retirement
plans and others holding shares in broker accounts under street names, the
Company estimates the shareholder base at approximately 63,000.




                              Market Price         Cash
                             -------------     Dividend
                             High       Low   Per Share
- -------------------------------------------------------
                                     
FISCAL YEAR 2000
4th Quarter                $24.22    $12.31    $ 0.07
3rd Quarter                 22.04     15.81      0.07
2nd Quarter                 23.92     17.36      0.07
1st Quarter                 23.24     13.78      0.07

FISCAL YEAR 1999
4th Quarter                $21.84    $15.50    $ 0.07
3rd Quarter                 22.75     18.31      0.07
2nd Quarter                 25.88     21.16     0.067
1st Quarter                 24.41     18.53     0.067


REPORT OF INDEPENDENT ACCOUNTANTS

TO THE BOARD OF DIRECTORS AND
SHAREHOLDERS OF INTIMATE BRANDS, INC.:

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, shareholders' equity and cash flows present
fairly, in all material respects, the financial position of Intimate Brands,
Inc. and its subsidiaries at February 3, 2001 and January 29, 2000, and the
results of their operations and their cash flows for each of the three years in
the period ended February 3, 2001 (on pages 30-35) in conformity with accounting
principles generally accepted in the United States of America. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Columbus, Ohio
February 27, 2001

                                                                            35

EX-21

                                                                      Exhibit 21


                         SUBSIDIARIES OF THE REGISTRANT

                                                                 Jurisdiction
         Subsidiaries (a)                                      of Incorporation
         ----------------                                      ----------------
Victoria's Secret Stores, Inc. (b)                                Delaware
Victoria's Secret Direct, LLC (c)                                 Delaware
Bath & Body Works, Inc. (d)                                       Delaware
Intimate Beauty Corporation (e)                                   Delaware
Intimate Brands Service Corporation (f)                           Delaware

(a)      The names of certain subsidiaries are omitted since such unnamed
         subsidiaries, considered in the aggregate as a single subsidiary, would
         not constitute a significant subsidiary as of February 3, 2001.

(b)      Victoria's Secret Stores, Inc. is a wholly-owned subsidiary of the
         registrant.

(c)      Victoria's Secret Direct, LLC is a wholly-owned subsidiary of
         Victoria's Secret Direct Holding LLC, a Delaware limited liability
         company and a wholly-owned subsidiary of the registrant.

(d)      Bath & Body Works, Inc. is a wholly-owned subsidiary of the registrant.

(e)      Intimate Beauty Corporation is a wholly-owned subsidiary of the
         registrant.

(f)      Intimate Brands Service Corporation is a wholly-owned subsidiary of the
         registrant.

                                      1

EX-23

                                                                Exhibit 23

                       CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3, Registration No. 333-78485, and the Registration
Statements on Form S-8, Registration Nos. 333-04921 and 333-04923, of
Intimate Brands, Inc. of our report dated February 27, 2001 relating to the
financial statements, which appears in the Annual Report to Shareholders,
which is incorporated in this Annual Report on Form 10-K.

/s/ PricewaterhouseCoopers LLP

Columbus, Ohio
April 23, 2001

EX-24

                                                                      Exhibit 24


                                POWER OF ATTORNEY
                            OFFICERS AND DIRECTORS OF
                              INTIMATE BRANDS, INC.

         The undersigned officer and/or director of Intimate Brands, Inc., a
Delaware corporation, which anticipates filing an Annual Report on Form 10-K for
its fiscal year ended February 3, 2001 under the provisions of the Securities
Exchange Act of 1934 with the Securities and Exchange Commission, Washington,
D.C., hereby constitutes and appoints Leslie H. Wexner, Kenneth B. Gilman
and V. Ann Hailey, and each of them, with full powers of substitution and
resubstitution, as attorney to sign for the undersigned in any and all
capacities such Annual Report on Form 10-K and any and all amendments thereto,
and any and all applications or other documents to be filed with the Securities
and Exchange Commission pertaining to such Annual Report on Form 10-K with full
power and authority to do and perform any and all acts and things whatsoever
required and necessary to be done in the premises, as fully to all intents and
purposes as the undersigned could do if personally present. The undersigned
hereby ratifies and confirms all that said attorney-in-fact and agent or his
substitute or substitutes may lawfully do or cause to be done by virtue hereof.


         EXECUTED as of the 26th day of January, 2001.


                                        /s/ LESLIE H. WEXNER
                                        --------------------
                                        Leslie H. Wexner







                                POWER OF ATTORNEY
                            OFFICERS AND DIRECTORS OF
                              INTIMATE BRANDS, INC.

         The undersigned officer and/or director of Intimate Brands, Inc., a
Delaware corporation, which anticipates filing an Annual Report on Form 10-K
for its fiscal year ended February 3, 2001 under the provisions of the
Securities Exchange Act of 1934 with the Securities and Exchange Commission,
Washington, D.C., hereby constitutes and appoints Leslie H. Wexner, Kenneth
B. Gilman and V. Ann Hailey, and each of them, with full powers of
substitution and resubstitution, as attorney to sign for the undersigned in
any and all capacities such Annual Report on Form 10-K and any and all
amendments thereto, and any and all applications or other documents to be
filed with the Securities and Exchange Commission pertaining to such Annual
Report on Form 10-K with full power and authority to do and perform any and
all acts and things whatsoever required and necessary to be done in the
premises, as fully to all intents and purposes as the undersigned could do if
personally present. The undersigned hereby ratifies and confirms all that
said attorney-in-fact and agent or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.

         EXECUTED as of the 26th day of January, 2001.


                              /s/ ROGER D. BLACKWELL
                              ----------------------
                              Roger D. Blackwell






                                POWER OF ATTORNEY
                            OFFICERS AND DIRECTORS OF
                              INTIMATE BRANDS, INC.

         The undersigned officer and/or director of Intimate Brands, Inc., a
Delaware corporation, which anticipates filing an Annual Report on Form 10-K for
its fiscal year ended February 3, 2001 under the provisions of the Securities
Exchange Act of 1934 with the Securities and Exchange Commission, Washington,
D.C., hereby constitutes and appoints Leslie H. Wexner, Kenneth B. Gilman
and V. Ann Hailey, and each of them, with full powers of substitution and
resubstitution, as attorney to sign for the undersigned in any and all
capacities such Annual Report on Form 10-K and any and all amendments thereto,
and any and all applications or other documents to be filed with the Securities
and Exchange Commission pertaining to such Annual Report on Form 10-K with full
power and authority to do and perform any and all acts and things whatsoever
required and necessary to be done in the premises, as fully to all intents and
purposes as the undersigned could do if personally present. The undersigned
hereby ratifies and confirms all that said attorney-in-fact and agent or his
substitute or substitutes may lawfully do or cause to be done by virtue hereof.


         EXECUTED as of the 26th day of January, 2001.


                             /s/ E. GORDON GEE
                             -----------------
                             E. Gordon Gee






                                POWER OF ATTORNEY
                            OFFICERS AND DIRECTORS OF
                              INTIMATE BRANDS, INC.

         The undersigned officer and/or director of Intimate Brands, Inc., a
Delaware corporation, which anticipates filing an Annual Report on Form 10-K for
its fiscal year ended February 3, 2001 under the provisions of the Securities
Exchange Act of 1934 with the Securities and Exchange Commission, Washington,
D.C., hereby constitutes and appoints Leslie H. Wexner, Kenneth B. Gilman
and V. Ann Hailey, and each of them, with full powers of substitution and
resubstitution, as attorney to sign for the undersigned in any and all
capacities such Annual Report on Form 10-K and any and all amendments thereto,
and any and all applications or other documents to be filed with the Securities
and Exchange Commission pertaining to such Annual Report on Form 10-K with full
power and authority to do and perform any and all acts and things whatsoever
required and necessary to be done in the premises, as fully to all intents and
purposes as the undersigned could do if personally present. The undersigned
hereby ratifies and confirms all that said attorney-in-fact and agent or his
substitute or substitutes may lawfully do or cause to be done by virtue hereof.


         EXECUTED as of the 26th day of January, 2001.


                           /s/ WILLIAM E. KIRWAN
                           ---------------------
                           William E. Kirwan






                                POWER OF ATTORNEY
                            OFFICERS AND DIRECTORS OF
                              INTIMATE BRANDS, INC.

         The undersigned officer and/or director of Intimate Brands, Inc., a
Delaware corporation, which anticipates filing an Annual Report on Form 10-K
for its fiscal year ended February 3, 2001 under the provisions of the
Securities Exchange Act of 1934 with the Securities and Exchange Commission,
Washington, D.C., hereby constitutes and appoints Leslie H. Wexner, Kenneth
B. Gilman and V. Ann Hailey, and each of them, with full powers of
substitution and resubstitution, as attorney to sign for the undersigned in
any and all capacities such Annual Report on Form 10-K and any and all
amendments thereto, and any and all applications or other documents to be
filed with the Securities and Exchange Commission pertaining to such Annual
Report on Form 10-K with full power and authority to do and perform any and
all acts and things whatsoever required and necessary to be done in the
premises, as fully to all intents and purposes as the undersigned could do if
personally present. The undersigned hereby ratifies and confirms all that
said attorney-in-fact and agent or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.

         EXECUTED as of the 26th day of January, 2001.


                              /s/ GRACE A. NICHOLS
                              --------------------
                              Grace A. Nichols






                                POWER OF ATTORNEY
                            OFFICERS AND DIRECTORS OF
                              INTIMATE BRANDS, INC.

         The undersigned officer and/or director of Intimate Brands, Inc., a
Delaware corporation, which anticipates filing an Annual Report on Form 10-K
for its fiscal year ended February 3, 2001 under the provisions of the
Securities Exchange Act of 1934 with the Securities and Exchange Commission,
Washington, D.C., hereby constitutes and appoints Leslie H. Wexner, Kenneth
B. Gilman and V. Ann Hailey, and each of them, with full powers of
substitution and resubstitution, as attorney to sign for the undersigned in
any and all capacities such Annual Report on Form 10-K and any and all
amendments thereto, and any and all applications or other documents to be
filed with the Securities and Exchange Commission pertaining to such Annual
Report on Form 10-K with full power and authority to do and perform any and
all acts and things whatsoever required and necessary to be done in the
premises, as fully to all intents and purposes as the undersigned could do if
personally present. The undersigned hereby ratifies and confirms all that
said attorney-in-fact and agent or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.

         EXECUTED as of the 26th day of January, 2001.


                              /s/ BETH M. PRITCHARD
                              ---------------------
                              Beth M. Pritchard







                                POWER OF ATTORNEY
                            OFFICERS AND DIRECTORS OF
                              INTIMATE BRANDS, INC.

         The undersigned officer and/or director of Intimate Brands, Inc., a
Delaware corporation, which anticipates filing an Annual Report on Form 10-K
for its fiscal year ended February 3, 2001 under the provisions of the
Securities Exchange Act of 1934 with the Securities and Exchange Commission,
Washington, D.C., hereby constitutes and appoints Leslie H. Wexner, Kenneth
B. Gilman and V. Ann Hailey, and each of them, with full powers of
substitution and resubstitution, as attorney to sign for the undersigned in
any and all capacities such Annual Report on Form 10-K and any and all
amendments thereto, and any and all applications or other documents to be
filed with the Securities and Exchange Commission pertaining to such Annual
Report on Form 10-K with full power and authority to do and perform any and
all acts and things whatsoever required and necessary to be done in the
premises, as fully to all intents and purposes as the undersigned could do if
personally present. The undersigned hereby ratifies and confirms all that
said attorney-in-fact and agent or his substitute or substitutes may lawfully
do or cause to be done by virtue hereof.

         EXECUTED as of the 26th day of January, 2001.


                              /s/ DONALD B. SHACKELFORD
                             --------------------------
                              Donald B. Shackelford








                                POWER OF ATTORNEY
                            OFFICERS AND DIRECTORS OF
                               INTIMATE BRANDS, INC.

         The undersigned officer and/or director of Intimate Brands, Inc., a
Delaware corporation, which anticipates filing an Annual Report on Form 10-K
for its fiscal year ended February 3, 2001 under the provisions of the
Securities Exchange Act of 1934 with the Securities and Exchange Commission,
Washington, D.C., hereby constitutes and appoints Leslie H. Wexner and V. Ann
Hailey, and each of them, with full powers of substitution and
resubstitution, as attorney to sign for the undersigned in any and all
capacities such Annual Report on Form 10-K and any and all amendments
thereto, and any and all applications or other documents to be filed with the
Securities and Exchange Commission pertaining to such Annual Report on Form
10-K with full power and authority to do and perform any and all acts and
things whatsoever required and necessary to be done in the premises, as fully
to all intents and purposes as the undersigned could do if personally
present. The undersigned hereby ratifies and confirms all that said
attorney-in-fact and agent or his substitute or substitutes may lawfully do
or cause to be done by virtue hereof.

         EXECUTED as of the 12th day of April, 2001.


                              /s/ DONNA A. JAMES
                              -----------------
                              Donna A. James

EX-99

                                                                Exhibit 99


                  THE LIMITED, INC. SAVINGS AND RETIREMENT PLAN

                    REPORT ON AUDITS OF FINANCIAL STATEMENTS
            AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
                            AND SUPPLEMENTAL SCHEDULE
                             AS OF DECEMBER 31, 2000




                                    CONTENTS

Independent Auditor's Report...........................................1

FINANCIAL STATEMENTS

Statements of Net Assets Available for Benefits........................2

Statements of Changes in Net Assets Available for Benefits.............3

Notes to Financial Statements..........................................4

SUPPLEMENTARY SCHEDULE

Schedule of Assets Held for Investment Purposes.......................11




































                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Board of Directors of
The Limited, Inc. and the
Plan Administrator of The Limited, Inc.
Savings and Retirement Plan:


We have audited the accompanying statements of net assets available for benefits
of The Limited, Inc. Savings and Retirement Plan as of December 31, 2000 and
1999, and the related statements of changes in net assets available for benefits
for the years then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2000 and 1999, and the changes in net assets available for benefits
for the years then ended, in conformity with generally accepted accounting
principles.

Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of investments
held for investment purposes is presented for the purpose of additional analysis
and is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.

/S/ Ary & Roepcke



Columbus, Ohio,
March 28, 2001











                  THE LIMITED, INC. SAVINGS AND RETIREMENT PLAN

                 STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

                           DECEMBER 31, 2000 AND 1999



                                                       2000             1999
                                                   ------------     ------------
ASSETS
Investments                                        $406,759,271     $454,072,603

Receivable for contributions:
     Employers                                       25,234,258       28,574,143
     Participants                                     1,600,717        1,709,157
                                                   ------------     ------------

         Total receivable contributions              26,834,975       30,283,300
                                                   ------------     ------------

Due from brokers                                           --            120,275
Accrued interest and dividends                           13,863           97,796
                                                   ------------     ------------

     Total assets                                   433,608,109      484,573,974
                                                   ------------     ------------

LIABILITIES

Cash overdraft                                            1,135             --
Administrative fees payable                             141,710           27,626
                                                   ------------     ------------

     Total liabilities                                  142,845           27,626
                                                   ------------     ------------

Net assets available for benefits                  $433,465,264     $484,546,348
                                                   ============     ============










   The accompanying notes are an integral part of these financial statements.






                  THE LIMITED, INC. SAVINGS AND RETIREMENT PLAN

           STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999




                                                       2000                 1999
                                                  -------------        -------------
                                                                 
ADDITIONS

Investment income:
     Net appreciation (depreciation) in
         fair value of investments                $ (74,624,579)       $  77,211,144
     Mutual funds' earnings                          20,084,246           12,083,572
     Dividends                                        1,424,582            1,525,988
     Investment contracts' earnings                   5,927,208              816,931
     Common collective trust's earnings                 392,764              484,641
                                                  -------------        -------------

         Total investment income (loss)             (46,795,779)          92,122,276
                                                  -------------        -------------

Contributions:
     Employers                                       34,937,314           39,536,720
     Participants                                    19,584,559           20,097,162
                                                  -------------        -------------

         Total contributions                         54,521,873           59,633,882
                                                  -------------        -------------

         Total additions                              7,726,094          151,756,158
                                                  -------------        -------------

DEDUCTIONS

     Distributions to participants                   56,984,295           56,199,313
     Administrative expenses                          1,822,883            1,061,328
                                                  -------------        -------------

         Total deductions                            58,807,178           57,260,641
                                                  -------------        -------------

Net increase (decrease) prior to transfers          (51,081,084)          94,495,517

Transfer of net assets available for
     benefits to plans of former affiliates                --            (18,001,283)
                                                  -------------        -------------

Net increase (decrease)                             (51,081,084)          76,494,234

NET ASSETS AVAILABLE FOR PLAN BENEFITS
     Beginning of year                              484,546,348          408,052,114
                                                  -------------        -------------

     End of year                                  $ 433,465,264        $ 484,546,348
                                                  =============        =============












   The accompanying notes are an integral part of these financial statements.







                  THE LIMITED, INC. SAVINGS AND RETIREMENT PLAN

                          NOTES TO FINANCIAL STATEMENTS

                           DECEMBER 31, 2000 AND 1999






(1)  DESCRIPTION OF THE PLAN

         GENERAL

         The Limited, Inc. Savings and Retirement Plan (the "Plan") is a defined
         contribution plan covering certain employees of The Limited, Inc. and
         its affiliates (the "Employers") who are at least 21 years of age and
         have completed 1,000 or more hours of service during their first
         consecutive twelve months of employment or any calendar year beginning
         in or after their first consecutive twelve months of employment.
         Effective January 1, 2000, an employee whose base salary equals or
         exceeds $100,000 and has met the eligibility requirements, described
         above, are eligible to receive the non-service related retirement
         contribution, but may not elect to make voluntary contributions.
         Certain employees of the Employers, who are covered by a collective
         bargaining agreement, are not eligible to participate in the Plan.

         Effective August 31, 1999, an affiliate of Freeman, Spogli & Co.
         (together with Galyan's management) purchased a 60% interest in
         Galyan's. Subsequent to the sale, the net assets available for benefits
         allocated to the former participants employed by Galyan's were
         transferred to Galyan's retirement plan.

         Effective August 23, 1999, The Limited, Inc. completed the spin-off of
         Too, Inc. (successor company to Limited Too). Subsequent to the
         spin-off, the net assets available for benefits allocated to the former
         participants employed by Limited Too were transferred to the Too, Inc.
         Savings and Retirement Plan.

         During 1999 the plan was amended several times to among other things 1)
         change the requirement for a participant to be active on the last day
         of the annual payroll period to a requirement for a participant to be
         active on the last day of the plan year as it relates to the Employers'
         service and non-service retirement contribution, and 2) allow for the
         establishment of unit values for one or more of the investment funds
         and permit the accounts setting forth each participant's interest in
         such investment funds to be maintained in terms of units.

         Effective January 1, 2000, the Plan was amended to among other things
         1) change the eligibility as noted under eligibility above and under
         participant's voluntary contributions below, and 2) allow forfeitures
         to be applied to reduce Plan expenses.

         The following description of the Plan provides only general
         information. Participants should refer to the Plan document for a more
         complete description of the Plan's provisions. The Plan is subject to
         the provisions of the Employee Retirement Income Security Act of 1974
         (ERISA) as amended.








         CONTRIBUTIONS

         Employers' contributions:

         The Employers may provide a non-service related retirement contribution
         of 4% of annual compensation up to the Social Security wage base and 7%
         of annual compensation thereafter, and a service related retirement
         contribution of 1% of annual compensation for participants who have
         completed five or more years of vesting service as of the last day of
         the Plan year. Participants who complete 500 hours of service during
         the Plan year and are participants on the last day of the Plan year are
         eligible. The annual compensation of each participant taken into
         account under the Plan is limited to the maximum amount permitted under
         Section 401(a)(17) of the Internal Revenue Code. The annual
         compensation limit for the Plan year ended December 31, 2000, was
         $170,000.

         The Employers may also provide a matching contribution of 100% of the
         participant's voluntary contributions (50% for participants who are
         associates of Galyan's) up to 3% of the participant's total annual
         compensation.

         Participant's voluntary contributions:

         A participant may elect to make a voluntary tax-deferred contribution
         of 1% to 6% of his or her annual compensation up to the maximum
         permitted under Section 402(g) of the Internal Revenue Code adjusted
         annually ($10,500 at December 31, 2000). This voluntary tax-deferred
         contribution may be limited by Section 401(k) of the Internal Revenue
         Code. Effective January 1, 2000, a participant whose base salary equals
         or exceeds $100,000 will cease being a participant for purposes of
         making voluntary contributions, the first day of the plan year
         following the year in which the $100,000 base salary threshold is met.
         Instead, such employee will become a participant in the Supplemental
         Retirement Plan, a non-qualified plan, for purposes of making voluntary
         contributions.

         INVESTMENT OPTIONS

         The Limited, Inc. Common Stock Fund - invests primarily in common stock
         of The Limited, Inc. with up to 3% of the fund being invested in
         money-market instruments. The goal of the fund is capital growth and
         dividend income.

         Intimate Brands, Inc. Common Stock Fund - invests primarily in common
         stock of Intimate Brands, Inc., an 84%-owned subsidiary of The Limited,
         Inc., with up to 3% of the fund being invested in money-market
         instruments. The goal of the fund is capital growth and dividend
         income.

         SARP Stable Value Fund - invests primarily in investment contracts,
         stable value contracts and short-term investments. The goal of the fund
         is preservation of principal and income while maximizing current
         income. This investment option was not available until October 1, 1999.

         Vanguard Retirement Savings Trust Fund - a mutual fund, investing in
         investment contracts issued by insurance companies and banks. The goal
         of the fund is to provide preservation of principal and income while
         maximizing current income. This investment option was not available
         after September 30, 1999.

         Vanguard Institutional Index Fund - a mutual fund, investing in the 500
         stocks that comprise the Standard & Poor's 500 Composite Stock Price
         Index (S&P 500) in proportion to their weighting in the index. The goal
         of the fund is long-term growth of capital and income from dividends.
         During 1999 this mutual fund replaced the Vanguard Index Trust 500
         Portfolio investment option, whose investment strategy and goals were
         similar.






         Vanguard U.S. Growth Fund - a mutual fund, investing primarily in
         large-capitalization stocks of seasoned U.S. companies with records of
         growth. The goal of the fund is long-term capital growth.

         Vanguard Wellington Fund - a mutual fund, investing 60-70% in the
         stocks of well-established companies and 30-40% in long-term maturity
         corporate bonds, Treasury Bonds and mortgage securities. The goal of
         the fund is current income and long-term growth of capital. This
         investment option was not available after September 30, 1999.

         Janus Overseas Fund - a mutual fund, investing at least 65% of its
         total assets in securities of issuers from at least five different
         countries, excluding the United States. The goal of the fund is
         long-term capital growth. This investment option was not available
         until October 1, 1999.

         American Century Income & Growth Fund - a mutual fund, investing
         primarily in common stocks selected from a universe of the 1,500
         largest companies traded in the U.S. The goal of the fund is dividend
         growth, current income, and capital appreciation. This investment
         option was not available until October 1, 1999.

         AIM Balanced Fund (Class A) - a mutual fund, investing primarily in
         high-yielding securities, including common stocks, preferred stocks,
         convertible securities and bonds. The goal of the fund is high total
         return consistent with preservation of capital. This investment option
         was not available until October 1, 1999.

         AXP Selective Fund (Class Y) - a mutual fund, investing primarily in
         medium-to high-quality corporate bonds and other highly rated debt
         instruments including government securities and short-term investments.
         The goal of the fund is current income and preservation of capital.
         This investment option was not available until October 1, 1999.

         American Express Trust Long-Term Horizon (80:20) Fund - a common
         collective trust, investing in a predetermined mix of growth,
         growth/income and income investments. The goal of the fund is to create
         a diversified portfolio with a moderate risk profile designed for
         individuals with long-term goals. This investment option was not
         available until October 1, 1999.

         American Express Trust Medium-Term Horizon (50:50) Fund - a common
         collective trust, investing in a predetermined mix of growth,
         growth/income, income, and money market (cash equivalents) investments.
         The goal of the fund is to create a diversified portfolio with a
         conservative risk profile designed for individuals with medium-term
         goals. This investment option was not available until October 1, 1999.

         American Express Trust Short-Term Horizon (25:75) Fund - a common
         collective trust, investing in a predetermined mix of growth,
         growth/income, income, and money market (cash equivalents) investments.
         The goal of the fund is to create a diversified portfolio with a
         conservative risk profile designed for individuals with short-term
         goals. This investment option was not available until October 1, 1999.

         Self-Directed Brokerage Account - allowing the participant to invest in
         securities not offered otherwise. This investment option was not
         available until October 1, 1999.

         VESTING

         A participant is fully and immediately vested for voluntary and
         rollover contributions and is credited with a year of vesting service
         in the Employers' contributions for each Plan year that they are
         credited with at least 500 hours of service. A summary of vesting
         percentages in the Employers' contributions follows:






         YEARS OF VESTED SERVICE                                       PERCENTAGE
         -----------------------                                       ----------
                                                                    
         Less than 3 years                                             0%
         3 years                                                       20
         4 years                                                       40
         5 years                                                       60
         6 years                                                       80
         7 years                                                       100

         PAYMENT OF BENEFITS

         The full value of participants' accounts becomes payable upon
         retirement, disability, or death. Upon termination of employment for
         any other reason, participants' accounts, to the extent vested, become
         payable. Those participants with vested account balances greater than
         $5,000 have the option of leaving their accounts invested in the Plan
         until age 65. All benefits will be paid as a lump-sum distribution.
         Those participants holding shares of Employer Securities will have the
         option of receiving such amounts in whole shares of Employer Securities
         and cash for any fractional shares. Participants have the option of
         having their benefit paid directly to an eligible retirement plan
         specified by the participant.

         A participant who is fully vested in his or her account and who has
         participated in the Plan for at least seven years may obtain an
         in-service withdrawal from their account based on the percentage
         amounts designated by the Plan. A participant may also request a
         hardship distribution due to an immediate and heavy financial need
         based on the terms of the Plan.

         AMOUNTS ALLOCATED TO PARTICIPANTS WITHDRAWN FROM THE PLAN

         The vested portion of net assets available for benefits allocated to
         participants withdrawn from the plan was $1,064,451 and $251,148 as of
         December 31, 2000 and 1999, respectively.

         FORFEITURES

         Forfeitures are used to reduce the Employers' required contributions,
         and if so elected by the Employers, to reduce administrative expenses.
         Forfeitures of $10,405,105 and $4,167,347 were used to reduce
         contributions for the years ended December 31, 2000 and 1999,
         respectively. Forfeitures of $769,952 and $405,187 were used to reduce
         administrative expenses for the years ended December 31, 2000 and 1999,
         respectively.

         EXPENSES AND FEES

         Expenses of the plan are deducted from participants' accounts as
         follows, 1) annual participant fee of from $12 to $200 based on their
         account balance which is deducted on a quarterly basis, 2) a $10
         disbursement fee for withdrawals and terminations, 3) a $3 fee for
         recurring installment disbursements, and 4) a $50 annual fee for a self
         directed brokerage account. Investments in the Limited, Inc., Intimate
         Brands, Inc., Too, Inc., and Abercrombie & Fitch Co. stock funds
         charged an administrative fee of 3 basis points through a reduction in
         earnings. Investments in the Sarp Stable Value Fund are charged an
         administrative fee of 30 basis points through a reduction in earnings.
         The Employers pay administrative expenses incurred in excess of these
         fees by either direct payment or forfeitures. Expenses and fees
         excluding those paid directly have been reported in the financial
         statements as administrative expenses. Prior to October 1, 1999,
         earnings from investments were reduced by a predetermined amount to pay
         for administrative expenses with any excess administrative fees being
         paid by the Employers.

                                      -7-







         Brokerage fees, transfer taxes, and other expenses incurred in
         connection with the investment of the Plan's assets will be added to
         the cost of such investments or deducted from the proceeds thereof, as
         the case may be.

(2)      SUMMARY OF ACCOUNTING POLICIES

         BASIS OF PRESENTATION

         The accompanying financial statements have been prepared on the accrual
         basis of accounting, including investment valuation and income
         recognition.

         ESTIMATES

         The Plan prepares its financial statements in conformity with generally
         accepted accounting principles, which requires management to make
         estimates and assumptions that affect the reported amounts of net
         assets available for plan benefits at the date of the financial
         statements and the changes in net assets available for plan benefits
         during the reporting period and, when applicable, disclosures of
         contingent assets and liabilities at the date of the financial
         statements. Actual results could differ from these estimates.

         RISKS

         The plan provides for the various investment options as described in
         Note 1. Any investment is exposed to various risks, such as interest
         rate, market and credit. These risks could result in a material effect
         on participants' account balances and the amounts reported in the
         statements of net assets available for benefits and the statements of
         changes in net assets available for benefits.

         INCOME RECOGNITION

         Purchases and sales of securities are recorded on a trade-date basis.
         Interest income is recorded on the accrual basis. Dividends are
         recorded on the ex-dividend date.

         INVESTMENT VALUATION

         Mutual funds are stated at fair value as determined by quoted market
         prices, which represents the net asset value of shares held by the Plan
         at year-end. Common stocks are valued as determined by quoted market
         price. The common collective trusts are valued on a daily basis. The
         value of each unit is determined by subtracting total liabilities from
         the total value of the assets, including accrued income, and dividing
         the amount remaining by the number of units outstanding on the
         valuation date. Investment contracts are recorded at contract value
         (Note 4).

         NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS

         Net realized and unrealized appreciation (depreciation) is recorded in
         the accompanying statements of changes in net assets available for
         benefits as net appreciation (depreciation) in fair value of
         investments.

         BENEFIT PAYMENTS

         Benefits are recorded when paid.

         RECLASSIFICATION OF PRIOR YEAR INFORMATION

         Certain prior year information has been reclassified to conform to
         current year presentation.

                                      -8-






(3)      INVESTMENTS
         The Plan's investments are held by the American Express Trust Company,
         as trustee of the Plan. Prior to October 1, 1999 the Plan's investments
         were held by The Chase Manhattan Bank, as trustee of the Plan. The
         following table presents balances for 2000 and 1999 for the Plan's
         current investment options. Investments that represent 5 percent or
         more of the Plan's net assets are separately identified.



                                                                       2000             1999
                                                               ------------     ------------
                                                                          
         Investments at fair value as determined by
              QUOTED MARKET PRICE Common stock:
                      The Limited, Inc.                        $ 69,100,258     $ 94,235,093
                      Other                                      16,880,923       19,385,157
                                                               ------------     ------------
                                                                 85,981,181      113,620,250
                                                               ------------     ------------

                  Warrants                                             --              2,594
                                                               ------------     ------------

                  Mutual funds:
                      Vanguard Institutional Index Fund          95,254,571      110,157,390
                      Vanguard U.S. Growth Portfolio             77,713,075       98,740,931
                      AIM Balanced Class A Fund                  26,356,111       27,398,996
                      Other                                       9,451,000        3,702,543
                                                               ------------     ------------
                                                                208,774,757      239,999,860
                                                               ------------     ------------
                      Total quoted market price                 294,755,938      353,622,704

              CONTRACT COST
                  Investment contracts                           93,314,059       74,075,377
              ESTIMATED FAIR VALUE
                  Common collective trusts                       18,689,274       26,374,522
                                                               ------------     ------------
                           Total investments at fair value     $406,759,271     $454,072,603
                                                               ============     ============

         The Plan's investments (including investments bought, sold, and held
         during the year) appreciation (depreciation) in value for the years
         ended December 31, 2000 and 1999, is set forth below:

                                                                  2000              1999
                                                          ------------      ------------
         Investments at fair value as determined by
              QUOTED MARKET PRICE
                  Common stock                            $(23,366,324)     $ 41,273,056
                  Warrants                                      (3,135)           (1,330)
                  Mutual funds                             (52,135,638)       35,677,665
                                                          ------------      ------------
                                                           (75,505,097)       76,949,391
              ESTIMATED FAIR VALUE
                  Common collective trusts                     880,518           261,753
                                                          ------------      ------------
                      Net appreciation (depreciation)
                           in fair value                  $(74,624,579)     $ 77,211,144
                                                          ============      ============


INVESTMENT CONTRACTS

         The Plan entered into investment contracts with insurance companies and
         financial institutions. The contracts are included in the financial
         statements at contract value, which approximates fair value, as
         reported to the Plan by the contract issuers. Contract value represents
         contributions made under the contract, plus earnings, less plan
         withdrawals and administrative expenses.

         These contracts provided a liquidity guarantee by financially
         responsible third parties of principal and previously accrued interest
         for liquidations, transfers, or hardship withdrawals initiated by plan
         participants exercising their rights to withdraw or transfer funds
         under the terms of the on-going Plan. The average yield on the
         contracts was 7.26% and 6.88% for the years ended December 31, 2000 and
         1999, respectively.







(5)      TAX STATUS

         The Plan obtained its latest determination letter on January 30, 1995,
         in which the Internal Revenue Service stated that the Plan, as amended
         and restated January 1, 1992 was in compliance with the applicable
         requirements of the Internal Revenue Code. The Plan has been amended
         since receiving the determination letter. However, the Plan
         administrator and the Plan's tax counsel believe that the Plan is
         designed and is currently being operated in compliance with the
         applicable requirements of the Internal Revenue Code.

(6)      PLAN ADMINISTRATION

         A Committee, the members of which are appointed by the Board of
         Directors of the Employers, administers the Plan.

(7)      PLAN TERMINATION

         Although the Employers have not expressed any intent to do so, the
         Employers have the right under the Plan to discontinue their
         contributions at any time. The Limited, Inc. has the right at any time,
         by action of its Board of Directors, to terminate the Plan subject to
         provisions of ERISA. Upon Plan termination or partial termination,
         participants will become fully vested in their accounts.

PARTIES-IN-INTEREST

         American Express Trust Company, trustee of the Plan, its subsidiaries
         and affiliates maintain and manage certain of the investments of the
         Plan for which the Plan is charged.

(9)      RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500

         The following is a reconciliation of net assets available for benefits
         per the financial statements to Form 5500:



                                                        2000               1999
                                               -------------      -------------
                                                            
         Net Assets Available for Benefits
             Per the Financial Statements      $ 433,465,264      $ 484,546,348
         Amounts Allocated to Withdrawing
             Participants                         (1,064,451)          (251,148)
                                               -------------      -------------

         Net Assets Available for Benefits
                 Per Form 5500                 $ 432,400,813      $ 484,295,200
                                               =============      =============



         The following is a reconciliation of benefits paid to participants per
         the financial statements to Form 5500:
                                                          
         Benefits Paid to Participants Per the Financial
             Statements                                      $ 56,984,295
         Amounts Allocated to Withdrawing Participants:
             At December 31, 2000                               1,064,451
             At December 31, 1999                                (251,148)
                                                             ------------

         Benefits Paid to Participants Per Form 5500         $ 57,797,598
                                                             ============


         Amounts allocated to withdrawing participants are recorded on Form 5500
         for benefit claims that have been processed and approved for payment
         prior to December 31 but not yet paid as of that date.






                                                                     SCHEDULE I

                  THE LIMITED, INC. SAVINGS AND RETIREMENT PLAN
                            EIN #31-1048997 PLAN #002
           SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT YEAR END
                                DECEMBER 31, 2000



   (a)                     (b)                                         (c)                           (d)         (e)
- ---------------------------------------------------------------------------------------------------------------------------
              Identity of issue, borrower,        Description of investment including maturity       (1)
                lessor, or similar party           date, rate of interest, collateral, par or
                                                                 maturity value                    Cost      Current Value
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                                         
    *     Limited, Inc.                          Common Stock - 4,049,832 shares                               $69,100,258

    *     Intimate Brands, Inc.                  Common Stock - 614,805 shares                                   9,222,075

          Too, Inc.                              Common Stock - 280,294 shares                                   3,564,199

          Abercrombie & Fitch Co.                Common Stock - 87,626 shares                                    1,752,520

          EMC Corp.                              Common Stock - 3,940 shares                                       262,010

          Applied Micro Circuits Corp.           Common Stock - 2,400 shares                                       180,113

          JDS Uniphase Corp.                     Common Stock - 2,956 shares                                       123,227

          PMC-Sierra, Inc.                       Common Stock - 1,565 shares                                       123,048

          Cisco Systems                          Common Stock - 2,854 shares                                       109,165

          NASDAQ Gold TR I Unit                  Common Stock - 1,225 shares                                        71,509

          General Electric                       Common Stock - 1,479 shares                                        70,899

          Triquant Semiconductor                 Common Stock - 1,600 shares                                        69,899

          Nokia Corp.                            Common Stock - 1,181 shares                                        51,374

          Qualcomm, Inc.                         Common Stock - 610 shares                                          50,134

          Ariba, Inc.                            Common Stock - 908 shares                                          48,692

          Laboratory Corporation of America      Common Stock - 250 shares                                          44,000

          Immunex Corp.                          Common Stock - 1,050 shares                                        42,656

          Network Applicance                     Common Stock - 600 shares                                          38,512

          Wal-Mart Stores                        Common Stock - 659 shares                                          35,009

          Cree, Inc.                             Common Stock - 930 shares                                          33,044

          Sun Microsystems                       Common Stock - 1,148 shares                                        32,001

          SDL, Inc.                              Common Stock - 200 shares                                          29,637

          Broadcom Corp.                         Common Stock - 300 shares                                          25,200

          Ciena Corporation                      Common Stock - 300 shares                                          24,375

          Universal Health Services Class B      Common Stock - 200 shares                                          22,350

          Impath, Inc.                           Common Stock - 325 shares                                          21,613


* Represents a party in interest

(1)      Cost information omitted - investment is part of individual account
         plan that a participant or beneficiary directed with respect to assets
         allocated to his or her account.


                                     -11-




                                                                     SCHEDULE I

                  THE LIMITED, INC. SAVINGS AND RETIREMENT PLAN
                            EIN #31-1048997 PLAN #002
           SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT YEAR END
                                DECEMBER 31, 2000



   (a)                     (b)                                         (c)                           (d)         (e)
- ---------------------------------------------------------------------------------------------------------------------------
              Identity of issue, borrower,        Description of investment including maturity       (1)
                lessor, or similar party           date, rate of interest, collateral, par or
                                                                 maturity value                    Cost      Current Value
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                                              
          KB Home                                Common Stock - 600 shares                                          20,212

          Amerisource Health Corp. Class A       Common Stock - 400 shares                                          20,200

          Texas Intruments                       Common Stock - 426 shares                                          20,182

          SEI Corp.                              Common Stock - 180 shares                                          20,160

          Standard Pacific Corp.                 Common Stock - 860 shares                                          20,103

          Mitchell Energy & Development          Common Stock - 325 shares                                          19,906

          Pharmaceutical Product                 Common Stock - 395 shares                                          19,625

          RF Micrio-Devices                      Common Stock - 706 shares                                          19,371

          Oracle Systems                         Common Stock - 646 shares                                          18,774

          Health Management Assoc Class A        Common Stock - 900 shares                                          18,675

          Walt Disney Co.                        Common Stock - 636 shares                                          18,404

          AOL Time Warner, Inc.                  Common Stock - 522 shares                                          18,166

          CitiGroup, Inc.                        Common Stock - 349 shares                                          17,821

          Microsoft Corp.                        Common Stock - 400 shares                                          17,350

          Motorola, Inc.                         Common Stock - 854 shares                                          17,294

          Intel Corp.                            Common Stock - 552 shares                                          16,594

          International Business Machines        Common Stock - 191 shares                                          16,235

          Corning, Inc.                          Common Stock - 290 shares                                          15,315

          Webmd Corp.                            Common Stock - 1,903 shares                                        15,104

          Tyco International                     Common Stock - 251 shares                                          13,931

          Jupiter Networks                       Common Stock - 107 shares                                          13,489

          Checkpoint Software                    Common Stock - 100 shares                                          13,356

          Unify                                  Common Stock - 3,390 shares                                        13,136

          Alexion Pharmaceutical                 Common Stock - 201 shares                                          13,052

          Lucent Technologies                    Common Stock - 926 shares                                          12,501

          Rambus, Inc.                           Common Stock - 330 shares                                          11,921

          Oak Technology, Inc.                   Common Stock - 1,333 shares                                        11,580

          Dell Computer Corp.                    Common Stock - 650 shares                                          11,334

          Vitesse Corp.                          Common Stock - 200 shares                                          11,062

          Xilinx, Inc.                           Common Stock - 237 shares                                          10,932

          Applied Materials                      Common Stock - 268 shares                                          10,234

          Asia Satellite  ADR                    Common Stock - 500 shares                                          10,188

          Siebel Systems                         Common Stock - 150 shares                                          10,144

          Home Depot                             Common Stock - 220 shares                                          10,051

          Verizon Communications                 Common Stock - 200 shares                                          10,025


                                     -12-





                                                                     SCHEDULE I

                  THE LIMITED, INC. SAVINGS AND RETIREMENT PLAN
                            EIN #31-1048997 PLAN #002
           SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT YEAR END
                                DECEMBER 31, 2000




   (a)                     (b)                                         (c)                           (d)         (e)
- ---------------------------------------------------------------------------------------------------------------------------
              Identity of issue, borrower,        Description of investment including maturity       (1)
                lessor, or similar party           date, rate of interest, collateral, par or
                                                                 maturity value                    Cost      Current Value
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                                               
          CMGI, Inc.                             Common Stock - 1,735 shares                                         9,706

          Sonus Networks                         Common Stock - 377 shares                                           9,519

          Gentex Corp.                           Common Stock - 500 shares                                           9,313

          Worldcom.Inc.                          Common Stock - 640 shares                                           9,000

          Federal National Mortgage              Common Stock - 100 shares                                           8,675

          Tanox, Inc.                            Common Stock - 212 shares                                           8,308

          Global Crossing LTD                    Common Stock - 570 shares                                           8,158

          Micromuse, Inc.                        Common Stock - 132 shares                                           7,967

          LSI Logic Corp.                        Common Stock - 462 shares                                           7,896

          Franklin Resources                     Common Stock - 200 shares                                           7,620

          Yahoo, Inc.                            Common Stock - 212 shares                                           6,372

          Sungard Data Systems, Inc.             Common Stock - 135 shares                                           6,362

          Vericalnet, Inc.                       Common Stock - 800 shares                                           5,325

          Comcast Corp.                          Common Stock - 125 shares                                           5,219

          AT&T Wireless Group                    Common Stock - 300 shares                                           5,194

          Exxon Mobil Corp.                      Common Stock - 58 shares                                            5,042

          Echelon Corp.                          Common Stock - 300 shares                                           4,819

          3 Com Corp.                            Common Stock - 550 shares                                           4,675

          Atmel Corp.                            Common Stock - 400 shares                                           4,650

          Pfizer, Inc.                           Common Stock - 100 shares                                           4,600

          Avanex Corporation                     Common Stock - 75 shares                                            4,467

          Finisar Corp.                          Common Stock - 150 shares                                           4,350

          Philip Morris                          Common Stock - 97 shares                                            4,268

          Qwest Communication International      Common Stock - 100 shares                                           4,088

          Quantum Corp.                          Common Stock - 300 shares                                           3,975

          Entrust Technology                     Common Stock - 300 shares                                           3,900

          Redback Networks                       Common Stock - 94 shares                                            3,854

          Glogic Corp.                           Common Stock - 50 shares                                            3,850

          Nortel Networks Corp                   Common Stock - 120 shares                                           3,847

          Sanmina Corp.                          Common Stock - 50 shares                                            3,831

          GAP, Inc.                              Common Stock - 150 shares                                           3,825

          People Soft                            Common Stock - 100 shares                                           3,719

          Huntington Bancshare                   Common Stock - 220 shares                                           3,561

          Exodus Communication                   Common Stock - 175 shares                                           3,500



                                     -13-




                                                                     SCHEDULE I

                  THE LIMITED, INC. SAVINGS AND RETIREMENT PLAN
                            EIN #31-1048997 PLAN #002
           SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT YEAR END
                                DECEMBER 31, 2000




   (a)                     (b)                                         (c)                           (d)         (e)
- ---------------------------------------------------------------------------------------------------------------------------
              Identity of issue, borrower,        Description of investment including maturity       (1)
                lessor, or similar party           date, rate of interest, collateral, par or
                                                                 maturity value                    Cost      Current Value
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                                               
          Compuware                              Common Stock - 558 shares                                           3,488

          Wind River Systems                     Common Stock - 100 shares                                           3,413

          Amazon. Com, Inc.                      Common Stock - 208 shares                                           3,237

          Cortex Pharmaceuticals, Inc.           Common Stock - 2,100 shares                                         3,215

          Extreme Networks, Inc.                 Common Stock - 82 shares                                            3,208

          Micron Technology                      Common Stock - 90 shares                                            3,195

          Advanced Micro Development             Common Stock - 230 shares                                           3,177

          Aether Systems, Inc.                   Common Stock - 81 shares                                            3,169

          Sycamore Networks, Inc.                Common Stock - 85 shares                                            3,166

          Procter & Gamble                       Common Stock - 40 shares                                            3,137

          Coca-Cola Co.                          Common Stock - 50 shares                                            3,047

          Online Power Supply, Inc.              Common Stock - 500 shares                                           3,000

          Brocade Communications                 Common Stock - 32 shares                                            2,938

          Johnson & Johnson                      Common Stock - 27 shares                                            2,837

          Conseco Co.                            Common Stock - 200 shares                                           2,637

    *     American Express                       Common Stock - 47 shares                                            2,582

          Storage Networks, Inc.                 Common Stock - 100 shares                                           2,481

          AT&T Corp.                             Common Stock - 139 shares                                           2,405

          Biogen, Inc.                           Common Stock - 40 shares                                            2,401

          Ford Motor Company                     Common Stock - 100 shares                                           2,344

          Foundry Networks                       Common Stock - 140 shares                                           2,100

          Orchid Biosciences, Inc.               Common Stock - 147 shares                                           2,058

          Digital Island, Inc.                   Common Stock - 500 shares                                           2,031

          Hewlett Packard                        Common Stock - 57 shares                                            1,799

          Taiwan Semi ADR                        Common Stock - 100 shares                                           1,725

          Agilent Technologies                   Common Stock - 30 shares                                            1,643

          Wireless Facilities                    Common Stock - 45 shares                                            1,631

          Portal Software                        Common Stock - 200 shares                                           1,569

          Stem Cells, Inc.                       Common Stock - 600 shares                                           1,500

          Koala Corp.                            Common Stock - 170 shares                                           1,445

          Priceline.Com, Inc.                    Common Stock - 1,099 shares                                         1,442

          Bio Technology General Corp.           Common Stock - 200 shares                                           1,412

          Glenayre Technologies, Inc.            Common Stock - 400 shares                                           1,412

          Warnaco                                Common Stock - 800 shares                                           1,350



                                     -14-




                                                                     SCHEDULE I

                  THE LIMITED, INC. SAVINGS AND RETIREMENT PLAN
                            EIN #31-1048997 PLAN #002
           SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT YEAR END
                                DECEMBER 31, 2000




   (a)                     (b)                                         (c)                           (d)         (e)
- ---------------------------------------------------------------------------------------------------------------------------
              Identity of issue, borrower,        Description of investment including maturity       (1)
                lessor, or similar party           date, rate of interest, collateral, par or
                                                                 maturity value                    Cost      Current Value
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                                               
          Genzyme Corp.                          Common Stock - 15 shares                                            1,349

          Power-One, Inc.                        Common Stock - 31 shares                                            1,219

          Microstrategy                          Common Stock - 125 shares                                           1,188

          Cypress Semiconductor                  Common Stock - 55 shares                                            1,083

          Resource Bancshares                    Common Stock - 150 shares                                           1,058

          ONI Systems Corp.                      Common Stock - 24 shares                                              949

          Serviceware Technology, Inc.           Common Stock - 200 shares                                             947

          General Magic, Inc.                    Common Stock - 648 shares                                             911

          Lanoptics LTD. ORD Shares              Common Stock - 90 shares                                              866

          Struthers, Inc.                        Common Stock - 4,000 shares                                           800

          Computer Associates International      Common Stock - 40 shares                                              780

          Koninklijke Philips Electronics        Common Stock - 21 shares                                              761

          Plaintree Systems, Inc.                Common Stock - 2,000 shares                                           750

          Razorfish, Inc.                        Common Stock - 459 shares                                             746

          Avaya                                  Common Stock - 68 shares                                              701

          Knight Trading Group, Inc.             Common Stock - 50 shares                                              697

          Bradlees, Inc.                         Common Stock - 2,700 shares                                           591

          Williams Communication                 Common Stock - 50 shares                                              588

          Eagle Wireless International, Inc.     Common Stock - 370 shares                                             578

          Barnes & Noble.Com, Inc.               Common Stock - 427 shares                                             560

          ASM Lithography                        Common Stock - 24 shares                                              541

          Inamed Corporation                     Common Stock - 25 shares                                              511

          AK Steel                               Common Stock - 50 shares                                              438

          Pawnbroker.Com, Inc.                   Common Stock - 3,375 shares                                           388

          Citrix Systems, Inc.                   Common Stock - 15 shares                                              338

          Internet Capital Group                 Common Stock - 100 shares                                             328

          Sunday Communication LTD               Common Stock - 160 shares                                             320

          Barpoint.Com, Inc.                     Common Stock - 235 shares                                             235

          Vasomedical, Inc.                      Common Stock - 100 shares                                             219

          Loudeye Technologies                   Common Stock - 150 shares                                             178

          Conexant Systems, Inc.                 Common Stock - 11 shares                                              169



                                     -15-




                                                                     SCHEDULE I

                  THE LIMITED, INC. SAVINGS AND RETIREMENT PLAN
                            EIN #31-1048997 PLAN #002
           SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT YEAR END
                                DECEMBER 31, 2000


   (a)                     (b)                                         (c)                           (d)         (e)
- ---------------------------------------------------------------------------------------------------------------------------
              Identity of issue, borrower,        Description of investment including maturity       (1)
                lessor, or similar party           date, rate of interest, collateral, par or
                                                                 maturity value                    Cost      Current Value
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                                          
          Vertical Computer System, Inc.         Common Stock - 2,732 shares                                           148

          Novell, Inc.                           Common Stock - 25 shares                                              130

          Pumatech, Inc.                         Common Stock - 28 shares                                              116

          Northpoint Community Group             Common Stock - 300 shares                                             103

          Verado Holdings, Inc.                  Common Stock - 135 shares                                              89

          Marvel Enterprises, Inc.               Common Stock - 50 shares                                               72

          Econnect                               Common Stock - 145 shares                                              45

          Calypte Biomedical                    Common Stock - 40 shares                                               42

          Xybernaut Corp.                        Common Stock - 20 shares                                               34

          Compositech LTD                        Common Stock - 295 shares                                              11

          Smart Sources, Inc.                    Common Stock - 100 shares                                               9

    *     American Express Trust Income I        Common Collective Trust - 241,876.395 shares                   13,179,361

    *     American Express Trust Money Market I  Common Collective Trust - 2,823,361.32 shares                   2,823,361

    *     American Express Trust Horizon Long    Common Collective Trust - 46,310.643 shares                     1,202,967
          Term (80:20)

    *     American Express Trust Horizon Medium  Common Collective Trust - 29,043.111 shares                       648,591
          Term (50:50)

    *     American Express Trust Money Market II Common Collective Trust - 465,291.11 shares                       465,291

    *     American Express Trust Horizon Short   Common Collective Trust - 20,730.254 shares                       369,703
          Term (25:75)

          Vanguard Institutional Index Fund      Mutual Fund - 789,053.765 shares                               95,254,571

          Vanguard U.S. Growth Fund              Mutual Fund - 2,810,599.444 shares                             77,713,075

          AIM Balanced Fund                      Mutual Fund - 875,909.316 shares                               26,356,111
          Class A

          Janus Overseas Fund                    Mutual Fund - 236,017.946 shares                                6,263,916

          American Century Income  & Growth Fund Mutual Fund - 58,942.651 shares                                 1,779,479

          Reserve Fund Class A                   Mutual Fund - 409,799.61 shares                                   409,800

          Janus Mercury Fund                     Mutual Fund - 4,680.031 shares                                    138,857



                                     -16-





                                                                     SCHEDULE I

                  THE LIMITED, INC. SAVINGS AND RETIREMENT PLAN
                            EIN #31-1048997 PLAN #002
           SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT YEAR END
                                DECEMBER 31, 2000



   (a)                     (b)                                         (c)                           (d)         (e)
- ---------------------------------------------------------------------------------------------------------------------------
              Identity of issue, borrower,        Description of investment including maturity       (1)
                lessor, or similar party           date, rate of interest, collateral, par or
                                                                 maturity value                    Cost      Current Value
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                                             
    *     American Express Selective Fund        Mutual Fund - 28,208.966 shares                                   246,546
          Class Y

          Invesco Technology Fund                Mutual Fund - 2,193.464 shares                                    131,103

          Janus Investment Fund                  Mutual Fund - 1,572.339 shares                                     83,759

          Janus Olympus Fund                     Mutual Fund - 134.662 shares                                       55,168

          Janus Worldwide Fund                   Mutual Fund - 906.598 shares                                       51,549

          American Century International Growth  Mutual Fund - 3,690.155 shares                                     40,333
          Fund

          Warburg Pincus Emerging Growth Fund    Mutual Fund - 750.036 shares                                       26,927

          Strong Enterprise Fund                 Mutual Fund - 762.758 shares                                       21,639

          Janus Investor Fund                    Mutual Fund - 553.334 shares                                       19,560

          Value Equity Trust Scudder Select 500  Mutual Fund - 1,486.905 shares                                     19,003

    *     American Express S&P 500 Index Fund    Mutual Fund - 3,436.173 shares                                     17,628

          Warburg Pincus Cap Fund                Mutual Fund - 696.418 shares                                       16,470

          Pacific Century                        Mutual Fund - 20,000  shares                                       12,000

          Firsthand Technology Value Fund        Mutual Fund - 132.071 shares                                        9,817

          PBGH Large Cap 20 Fund                 Mutual Fund - 372.043 shares                                        9,375

          Invesco Telecommunications Fund        Mutual Fund - 224.601 shares                                        8,149

          Invesco Dynamics Fund                  Mutual Fund - 313.964 shares                                        7,463

          Invesco Sector Health Sciences Fund    Mutual Fund - 124.216 shares                                        7,375

          Strong Growth 20 Fund                  Mutual Fund - 289.825 shares                                        7,283

          Van Wagoner Technology Fund            Mutual Fund - 127.421 shares                                        5,335

          Gabelli Global Communications Fund     Mutual Fund - 223.518 shares                                        3,941

          Janus Global Life Sciences Fund        Mutual Fund - 179.276 shares                                        3,845

          PBHG Tech & Communications Fund        Mutual Fund - 110.179 shares                                        3,793

          Invesco Growth Inc.                    Mutual Fund - 234.058 shares                                        3,745

          Janus Fund                             Mutual Fund - 105.59 shares                                         3,515

          SIT Small Cap Growth Fund              Mutual Fund - 90.302 shares                                         3,175



                                     -17-





                                                                     SCHEDULE I

                  THE LIMITED, INC. SAVINGS AND RETIREMENT PLAN
                            EIN #31-1048997 PLAN #002
           SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT YEAR END
                                DECEMBER 31, 2000




   (a)                     (b)                                         (c)                           (d)         (e)
- ---------------------------------------------------------------------------------------------------------------------------
              Identity of issue, borrower,        Description of investment including maturity       (1)
                lessor, or similar party           date, rate of interest, collateral, par or
                                                                 maturity value                    Cost      Current Value
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                                               
          Dresdner RCM Global Technology Fund    Mutual Fund - 68.446 shares                                         3,428

          Turner Mid Cap Fund                    Mutual Fund - 97.448 shares                                         2,981

          Oak Associates Red Oak Technology      Mutual Fund - 131.096 shares                                        2,855
          Selection Portfolio

          Invesco International Fund             Mutual Fund - 158.492 shares                                        2,821

          Firsthand Technology Leaders Fund      Mutual Fund - 78.17 shares                                          2,645

          Warburg Pincus Global                  Mutual Fund - 59.304 shares                                         2,500
          Telecommunications Fund

          Invesco Sector Leisure Fund            Mutual Fund - 66.806 shares                                         2,440

          SSGA Real Estate Equity Fund           Mutual Fund - 235.268 shares                                        2,263

          Janus Strategic Value Fund             Mutual Fund - 203.837 shares                                        2,144

          Strong Mid Cap Growth Fund             Mutual Fund - 99.454 shares                                         2,010

    *     American Express Blue Chip Advantage   Mutual Fund - 181.168 shares                                        1,772
          Fund

          Strong Small Cap Value Fund            Mutual Fund - 100.334 shares                                        1,723

          American Century Twentieth Century     Mutual Fund - 92.238 shares                                         1,414
          Vista Fund

          American Century Twentieth Century     Mutual Fund - 94.072 shares                                         1,369
          Heritage

          Janus Orion Fund                       Mutual Fund - 192.136 shares                                        1,347

          Mid Cap Fund                           Mutual Fund - 49.015 shares                                         1,304

          Dreyfus Discovery Fund Class F         Mutual Fund - 36.04 shares                                          1,252

          Warburg Pincus Global Post Venture     Mutual Fund - 53.267 shares                                         1,209
          Cap Fund

          Oak Associates Pin Oak Aggressive      Mutual Fund - 23.226 shares                                         1,080
          Stock Portfolio



                                     -18-




                                                                     SCHEDULE I

                  THE LIMITED, INC. SAVINGS AND RETIREMENT PLAN
                            EIN #31-1048997 PLAN #002
           SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT YEAR END
                                DECEMBER 31, 2000




   (a)                     (b)                                         (c)                           (d)         (e)
- ---------------------------------------------------------------------------------------------------------------------------
              Identity of issue, borrower,        Description of investment including maturity       (1)
                lessor, or similar party           date, rate of interest, collateral, par or
                                                                 maturity value                    Cost      Current Value
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                                               
          Green Century Balanced Fund            Mutual Fund - 53.821 shares                                         1,008

          TIAA-CREF Growth &                     Mutual Fund - 63.164 shares                                           887
          Income Fund

          Chase Manhattan                        Investment contract - 11,826,343 - 6.97% due                   12,885,557
                                                 12/31/50

          UBS                                    Investment contract - 8,968,606 - 7.17% due                     9,794,877
                                                 12/31/50

          JP Morgan                              Investment contract - 9,005,657 - 7.34% due                     9,679,931
                                                 12/31/50

          CDC                                    Investment contract - 8,655,491 - 7.02% due                     9,441,021
                                                 12/31/50

          Bank of America II                     Investment contract - 8,412,660 - 6.99% due                     9,098,704
                                                 12/31/50

          Protective                             Investment contract - 5,000,000 - 7.30% due                     5,314,630
                                                 02/17/04

          GE Life                                Investment contract - 5,000,000 - 7.10% due                     5,130,402
                                                 11/15/04

          Travelers                              Investment contract - 5,000,000 - 7.20% due                     5,071,945
                                                 10/15/03

          Bank of America I                      Investment contract - 4,444,308 - 7.19% due                     4,847,455
                                                 12/31/50

          Travelers                              Investment contract - 3,000,000 - 7.80% due                     3,201,591
                                                 05/15/05

          GE Life                                Investment contract - 3,000,000 - 7.79% due                     3,200,641
                                                 04/15/05

          Protective                             Investment contract - 3,000,000 - 7.71% due                     3,190,012
                                                 04/15/03

          Travelers                              Investment contract - 3,000,000 - 7.58% due                     3,173,490
                                                 06/15/03

          Protective                             Investment contract - 3,000,000 - 7.92% due                     3,153,288
                                                 08/15/05

          Protective                             Investment contract - 2,000,000 - 8.24% due                     2,099,896
                                                 08/15/05

          GE Life                                Investment contract - 2,000,000 - 7.28% due                     2,019,734
                                                 02/15/06

          Hartford                               Investment contract - 2,000,000 - 7.07% due                     2,010,885
                                                 12/14/05


                                     -19-

EX-99.1

                                                                    Exhibit 99.1

                              INTIMATE BRANDS, INC.

          CAUTIONARY STATEMENTS RELATING TO FORWARD-LOOKING INFORMATION

THE COMPANY AND ITS REPRESENTATIVES MAY, FROM TIME TO TIME, MAKE WRITTEN OR
VERBAL FORWARD-LOOKING STATEMENTS. THOSE STATEMENTS RELATE TO DEVELOPMENTS,
RESULTS, CONDITIONS, OR OTHER EVENTS THE COMPANY EXPECTS OR ANTICIPATES WILL
OCCUR IN THE FUTURE. WITHOUT LIMITING THE FOREGOING, THOSE STATEMENTS MAY RELATE
TO FUTURE REVENUES, EARNINGS, STORE OPENINGS, MARKET CONDITIONS, AND THE
COMPETITIVE ENVIRONMENT. FORWARD-LOOKING STATEMENTS ARE BASED ON MANAGEMENT'S
THEN-CURRENT VIEWS AND ASSUMPTIONS AND, AS A RESULT, ARE SUBJECT TO RISKS AND
UNCERTAINTIES, INCLUDING THOSE DESCRIBED BELOW, WHICH MAY BE OUTSIDE OF THE
COMPANY'S CONTROL AND THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE PROJECTED. THE FOLLOWING RISKS ARE NOT THE ONLY ONES FACING THE COMPANY
AND ADDITIONAL RISKS AND UNCERTAINTIES MAY ALSO DEVELOP THAT IMPAIR THE
COMPANY'S BUSINESS OPERATIONS.

ALL FORWARD-LOOKING STATEMENTS ARE QUALIFIED BY THE FOLLOWING WHICH, IF THEY
DEVELOP INTO ACTUAL EVENTS, WOULD HAVE A MATERIAL ADVERSE EFFECT ON THE
COMPANY'S BUSINESS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS. IN ADDITION,
INVESTORS IN THE COMPANY SHOULD CONSIDER THE FOLLOWING RISK FACTORS, AS WELL AS
THE OTHER INFORMATION CONTAINED HEREIN.

THE COMPANY'S REVENUE AND PROFIT RESULTS ARE SENSITIVE TO GENERAL ECONOMIC
CONDITIONS, CONSUMER CONFIDENCE AND SPENDING PATTERNS.

         The Company's growth, sales and profitability may be adversely affected
by negative local, regional or national economic trends that shake consumer
confidence. Purchases of women's intimate and other apparel, personal care
products and accessories often decline during periods when economic or market
conditions are unsettled or weak. In such circumstances, the Company may
increase the number of promotional sales, which would further adversely affect
its profitability.

THE COMPANY'S NET SALES, OPERATING INCOME AND INVENTORY LEVELS FLUCTUATE ON A
SEASONAL BASIS.

         The Company experiences major seasonal fluctuations in its net sales
and operating income, with a significant portion of its operating income
typically realized during the fourth quarter holiday season. The Company's
quarterly results of operations may also fluctuate significantly as a result of
other factors such as the timing of catalog mailings. Any decrease in sales or
margins during those periods could have a disproportionate effect on the
Company's financial condition and results of operations.

         Seasonal fluctuations also affect the Company's inventory levels, since
it usually orders merchandise in advance of peak selling periods and sometimes
before new fashion trends are confirmed by customer purchases. The Company must
carry a significant amount of inventory, especially before the holiday season
selling period.

THE COMPANY MAY BE UNABLE TO COMPETE FAVORABLY IN ITS HIGHLY COMPETITIVE SEGMENT
OF THE RETAIL INDUSTRY.

         The sale of women's intimate and other apparel, personal care products
and accessories is highly competitive. Increased competition could result in
price reductions, increased marketing expenditures and loss of market share,
all of which would have a material adverse effect on the Company's financial
condition and results of operations.

         The Company competes for sales with a broad range of other retailers,
including individual and chain fashion specialty stores, and department stores.
In addition to the traditional store-based retailers, the Company


                                      1


also competes with direct marketers that sell similar lines of merchandise,
who target customers through catalogs and e-commerce. Direct marketers also
include traditional store-based retailers like the Company who are competing
in the catalog and e-commerce distribution channels. The Company's direct
response business competes with numerous national and regional catalog and
e-commerce merchandisers. Brand image, marketing, fashion design, price,
service, quality image presentation and fulfillment are all competitive
factors in catalog and e-commerce sales.

         Some of the Company's competitors may have greater financial, marketing
and other resources available to them. In many cases, the Company's primary
competitors sell their products in department stores that are located in the
same shopping malls as the Company's stores. In addition to competing for sales,
the Company competes for favorable site locations and lease terms in shopping
malls.

THE COMPANY MAY NOT BE ABLE TO KEEP UP WITH FASHION TRENDS AND MAY NOT BE ABLE
TO LAUNCH NEW PRODUCT LINES SUCCESSFULLY.

         The Company's success depends in part on management's ability to
effectively anticipate and respond to changing fashion tastes and consumer
demands and to translate market trends into appropriate, saleable product
offerings far in advance. Customer tastes and fashion trends change rapidly. If
the Company is unable to successfully anticipate, identify or react to changing
styles or trends and misjudges the market for its products or any new product
lines, the Company's sales will be lower and it may be faced with a significant
amount of unsold finished goods inventory. In response, the Company may be
forced to increase its marketing promotions or price markdowns, which would have
a material adverse effect on its business. The Company's brand image may also
suffer if customers believe merchandise misjudgments indicate that the Company
is no longer able to offer the latest fashions.

THE COMPANY MAY LOSE KEY PERSONNEL.

         The Company believes that it has benefited substantially from the
leadership and experience of its senior executives, including Leslie H. Wexner
(its Chairman of the Board of Directors and Chief Executive Officer). The loss
of the services of any of these individuals would have a material adverse effect
on the business and prospects of the Company. The Company's future success will
also depend on its ability to recruit, train and retain other qualified
personnel. Competition for key personnel in the retail industry is intense.

INCREASES IN COSTS OF MAILING, PAPER AND PRINTING.

         Postal rate increases and paper and printing costs will affect the cost
of the Company's order fulfillment and catalog and promotional mailings. The
Company relies on discounts from the basic postal rate structure, such as
discounts for bulk mailings and sorting by zip code and carrier routes. The
Company is not party to any long-term contracts for the supply of paper and
purchases paper from paper mills at specified rates. Future paper and postal
rate increases would adversely impact the Company's earnings if it was unable to
pass such increases directly onto its customers or offset such increases by
raising prices or by implementing more efficient printing, mailing, delivery and
order fulfillment systems.


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CONTROL BY CERTAIN SHAREHOLDERS - THE LIMITED INC. CONTROLS THE COMPANY.

         The Limited owns 100% of the Company's outstanding Class B Common
Stock. The Class B Common Stock represents a majority in voting power of all
classes of the Company's voting stock and, as a result, The Limited is able to
elect all the members of the Company's board of directors and effectively
control the outcome of certain matters requiring a stockholder vote. Such
ownership of common stock may have the effect of delaying, deferring or
preventing a change of control.

         For as long as The Limited has beneficial ownership of a majority of
the number of outstanding shares of the Company's common stock, the Company may
not act in a way which will result in The Limited contravening

          o    its certificate of incorporation or by-laws;

          o    any binding credit agreement to which it is a party; and

          o    any judgment, order or decree of any governmental body with
               jurisdiction over it.

         This may prevent the Company from acting in its own interest.

THE COMPANY'S RELATIONSHIP WITH THE LIMITED COULD EXPOSE IT TO CONFLICTS OF
INTEREST.

         Various conflicts of interest could arise between the Company and The
Limited. These conflicts would be due to, among other factors, cross
directorships and the ownership interests of the Company's directors and
officers in common stock of The Limited when these directors and officers are
faced with decisions that could have conflicting results for the Company and The
Limited.

         The Limited is not restricted from competing with the Company in any
manner and there can be no assurance that The Limited will not expand its line
of products or business in a manner that would result in direct competition with
the Company's business.

THE COMPANY'S UNAFFILIATED MANUFACTURERS MAY BE UNABLE TO MANUFACTURE AND
DELIVER PRODUCTS IN A TIMELY MANNER OR MEET QUALITY STANDARDS.

          The Company purchases apparel through The Limited's wholly owned
subsidiary, Mast, a contract manufacturer and apparel importer. Apparel,
personal care, fragrance and beauty products are also purchased through other
contract manufacturers and importers and directly from unaffiliated
manufacturers. Similar to most other specialty retailers, the Company has
narrow sales windows for much of its inventory. Factors outside the Company's
control, such as manufacturing or shipping delays or quality problems, could
disrupt merchandise deliveries and result in lost sales and profits,
cancellation charges or excessive markdowns.

THE COMPANY RELIES SIGNIFICANTLY ON FOREIGN SOURCES OF PRODUCTION.

         The Company purchases apparel merchandise directly in foreign
markets and in the domestic market, some of which is manufactured overseas.
The Company does not have any long-term merchandise supply contracts and many
of its imports are subject to existing or potential duties, tariffs or
quotas. The Company competes with other companies for production facilities
and import quota capacity.

         The Company also faces a variety of other risks generally associated
with doing business in foreign markets and importing merchandise from abroad,
such as:

          o    political instability;

          o    imposition of new legislation relating to import quotas that may
               limit the quantity of goods which may be imported into the United
               States from countries in that region;

          o    imposition of duties, taxes, and other charges on imports;

          o    currency and exchange risks; and


                                      3


          o    local business practice and political issues, including issues
               relating to compliance with domestic or international labor
               standards which may result in adverse publicity.

         New initiatives may be proposed that may have an impact on the trading
status of certain countries and may include retaliatory duties or other trade
sanctions which, if enacted, would increase the cost of products purchased from
suppliers in such countries. The future performance of the Company will depend
upon this and the other factors listed above which are beyond its control. These
factors may have a material adverse effect on the business of the Company.

THE COMPANY DEPENDS ON A HIGH VOLUME OF MALL TRAFFIC AND THE AVAILABILITY OF
SUITABLE LEASE SPACE.

         Many of the Company's stores are located in shopping malls. Sales at
these stores are derived, in part, from the high volume of traffic in those
malls. The Company's stores benefit from the ability of the mall's "anchor"
tenants, generally large department stores, and other area attractions to
generate consumer traffic in the vicinity of its stores and the continuing
popularity of malls as shopping destinations. Sales volume and mall traffic may
be adversely affected by economic downturns in a particular area, competition
from non-mall retailers and other malls where the Company does not have stores
and the closing of anchor department stores. In addition, a decline in the
desirability of the shopping environment in a particular mall, or a decline in
the popularity of mall shopping among the Company's target consumers, would
adversely affect its business.

          Part of the Company's future growth is significantly dependent on its
ability to open new stores in desirable locations with capital investment and
lease costs that allow the Company to earn a reasonable return. The Company
cannot be sure as to when or whether such desirable locations will become
available at reasonable costs.

THE COMPANY MAY NOT BE ABLE TO MANAGE ITS GROWTH.

         The Company's principal businesses, including its catalog and
e-commerce sales, have grown rapidly over the past several years. The Company's
future growth prospects are dependent on several factors, including:

          o    the availability of suitable store locations;

          o    the ability to develop new merchandise at prices that appeal to a
               broad range of customers;

          o    the ability to deliver products on a timely basis; and

          o    the ability to hire and train qualified associates.

         The Company may not be able to continue to grow rapidly or profitably
or manage its growth effectively.


                                      4



THE PRICE OF THE COMPANY'S CLASS A COMMON STOCK MAY BE VOLATILE.

         The price of the Company's Class A Common Stock may fluctuate
substantially as a result of quarter to quarter variations in the actual or
anticipated financial results of the Company or other companies in the retail
industry or markets served by the Company. In addition, the stock market has
experienced price and volume fluctuations that have affected the market price of
many retail stocks and that have often been unrelated or disproportionate to the
operating performance of these companies.


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