Pandemic ‘nesting’ isn’t enough to revive Victoria’s Secret
L Brands’ lingerie chain slips while Bed, Bath & Beyond lathers up
Bath & Body Works posted a 55% jump in quarterly sales as the coronavirus fueled demand for soap and hand sanitizer, helping its parent company offset another quarter of declining sales at its Victoria’s Secret lingerie brand.
VICTORIA'S SECRET PARENT CUTTING 850 CORPORATE JOBS
L Brands Inc., which owns both chains, said Wednesday it swung to a profit and its overall sales rose 14% in the quarter ended Oct. 31. In August, L Brands said it would close 250 Victoria’s Secret stores and cut 15% of its corporate jobs as it prepares to separate the two brands.
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Personal hygiene products such as hand sanitizers and soaps boosted Bath & Body Works sales to $1.7 billion, up about $600 million from a year ago. Executives said they were able to pull back on promotions given the strong demand both in stores and online.
Victoria’s Secret had higher sales in sleepwear and lounge as more people are “nesting” at home, executives said, but its total sales fell 14% to $1.35 billion. Declining store sales offset e-commerce and catalog gains for the brand. The women’s catalog brand, once the staple of beauty and lingerie fashion, has experienced declining sales for years.
Executives are trying to turn around Victoria’s Secret after a plan to sell a controlling stake to private equity firm Sycamore Partners collapsed earlier this year. The deal was scrapped after Sycamore claimed that furloughs and store closures related to the Covid-19 pandemic violated the terms of the deal.
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After the failed deal, longtime L Brands leader Les Wexner stepped down as CEO. Mr. Wexner had faced scrutiny amid alleged ties to the late Jeffrey Epstein, who was indicted last year for a scheme to sexually abuse minors.
Victoria’s Secret canceled its annual fashion show for the first time since its creation in the 1990s to remanage the brand’s marketing strategy. It also brought back catalog mailings after deciding to cut them.
The brand has been trying to turn its image around, L Brands and Bath & Body Works Chief Executive Andrew Meslow said in a statement. “Customers have noticed the changes that we’ve made in our merchandise assortments and marketing and are responding positively,” he said.
L Brands said its profit was $330.6 million for the October-ended quarter, compared with a loss of $252 million a year earlier when it took a large write-down on the value of the Victoria’s Secret brand.