LBrands will close Victoria’s Secret stores in the United States and Canada
LBrands plans to close approximately 250 Victoria’s Secret stores in the United States and Canada in 2020 as part of the company’s forward-looking business plan, which also includes a greater focus on inventory management and procurement cost reduction .
In the first quarter earnings review on May 20, 2020, LBrands, the owner of the Victoria’sSecret, Pink, and Bath & BodyWorks brands, gave an overview of the Victoria’sSecret and Pink brands forward plans, noting that it will work to separate the business as an independent company.
The strategy includes the group’s significantly increasing focus on inventory management, reducing procurement costs and cutting tariffs, as well as increasing full-price sales of new items.
It also plans to “significantly reduce” the cost of sales in stores, including Victoria’s Secret’s own stores under LBrands, emphasizing that it must be significantly consistent with economic principles.
The company said: We estimate that we will close approximately 250 stores in the United States and Canada by 2020.
LBrands operates 1,091 Victoria’s Secret stores in the United States and Canada, including 909 Victoria’s Secret stores and 144 Pink stores in the United States, and 33 stores in Canada. Victoria’s Secret stores and 5 Pink stores.
According to a report released by “USA Today”, LBrands will close 235 Victoria’s Secret and 3 Pink stores in the United States and 13 Canadian stores . The article also claimed that LBrands also plans to close 50 Bath & Body Works stores in the United States and 1 store in Canada.
News of the store closures emerged after private equity firm Sycamore Partners made a proposed acquisition of the Victoris’ Secret brand, but after the two companies reached a “mutual agreement” to terminate the deal. , the acquisition intention was cut in half earlier in May.
In February this year, LBrands reached a US$525 million deal with Sycamore Partners, just before the outbreak of the new coronavirus pneumonia epidemic and the nationwide lockdown. The transaction will see Sycamore Partners control 55% of the shares of Victoria’s Secret Lingerie, Victoria’s Secret Beauty and Pink brands, while Bath & Body Works, the more profitable business in the group, will reposition itself as an independent company. Victoria’s Secret has been criticized for dragging down Bath & BodyWorks’ performance, which is why investors have long demanded a split.
LBrands stated in the financial report that the company will continue to be committed to building Bath&BodyWorks into a purely listed company and take the necessary steps to prepare for Victoria’s Secret Lingerie, Victoria’ Businesses such as sSecretBeautyandPink are operated separately as independent companies.
As part of its company’s forward-looking plan, LBrands is also actively evaluating strategic options to reduce or eliminate losses in the UK and China, while conducting ” Comprehensive Review”. The company said this will include decentralizing critical functions and services in favor of creating an independent company and significantly reducing overhead expenses while focusing on retaining key talent.
LBrands pointed out in a document submitted to the U.S. Securities and Exchange Commission (SEC) that Charles McGuigan will no longer serve as chief cultural officer, effective July 4 Take effect.
The group reported that net sales in the first quarter as of May 2 were US$1.65 billion, a decrease of 59.4% compared with US$2.63 billion in the same period in 2019. The group’s net loss in the first quarter of 2020 reached US$296.9 million, compared with net income of US$40.3 million in the same period in 2019.
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