Below is a look at the company's 2019 highlights, recent acquisitions, best-selling brands and latest innovations.
Beauty and Home Fragrance Sales
$5 billion (est.)
- Leslie Wexner, chairman and CEO
- Greg Unis, chief executive officer, Victoria’s Secret Beauty
- Nick Coe, chief executive officer, Bath & Body Works
- Martin Waters, chief executive officer and president, L Brands International
- Bath & Body Works home and personal care
- White Barn home fragrances
- Victoria’s Secret fine fragrances and cosmetics
- Bath & Body Works—Gingham fragrance collection, Pineapple Mango 3-Wick Candle
- Victoria’s Secret Beauty—Bombshell Paradise (Summer Fragrance Collection)
- Eau de Parfum Rollerballs
- In Bloom Fragrance Mists
Comments: L Brands’ 2018 operating income declined while growth across its brands was mixed. The company’s overall net sales increased $605 million to $13.2 billion, and ongoing declines in the flagship Victoria’s Secret brand were offset by an 11% Bath & Body Works net sales increase of $483 million to $4.63 billion thanks to boosts in most category sales spanning new home fragrance, body care and soaps and sanitizers. Sales in Bath & Body Works’ digital channel increased 30%, and operating income increased 13%.
The direct business aspect of the company’s Victoria’s Secret and Bath & Body Works accrued $2.5 billion in sales and had operating margins in excess of 20% with growth at a mid-to-high-teens rate. L Brands said it planned “substantial” future investments in technology and logistics in 2019 to help promote sustained growth.
The Victoria’s Secret Beauty division had a record sales year with “low-double digit comps” under the leadership of Greg Unis. In 2018, the company began development of PINK Beauty and will continue growing that business in 2019. Likewise, Victoria’s Secret and Bath & Body Works International saw 2018 net sales increase by 20% ($103 million) to $605 million due to new company-owned Victoria’s Secret stores, direct channel growth in Greater China and additional stores opened by L Brands’ partners.
Moving forward, the company promised to review and improve its brand marketing and communications and deliver a more disciplined and proactive management of inventory, expenses, real estate and capital structure. Part of that was a careful assessment of the company’s global presence. L Brands’ total number of Victoria’s Secret, Bath & Body Works, La Senza and Henri Bendel stores dropped from 3,075 in Feb. 2018 to 2,943 in Feb. 2019, the company’s number of B&B stores in the U.S. and in Canada actually grew from 1,694 in February 2018 to 1,721 by February 2019. The company said it intends to maximize its footprint specifically in its Bath & Body Works and White Barn divisions, with the goal of increasing North American Bath & Body Works square footage by about 3% through the opening of approximately 25 new Bath & Body Works stores and the remodeling of existing stores.
News of Note in 2019
Further streamlining costs, L Brands shuttered all 27 of its Henri Bendel stores in January 2019, as well as the brand’s corresponding e-commerce website. The 123-year old, New York-based retail establishment had sold women’s handbags, jewelry, luxury fashion accessories and home fragrances since 1895.
The company also sold off its La Senza lingerie business to a global private equity firm in January, and in March, announced it would close up to 53 of its Victoria’s Secret stores over the course of 2019. The closures represent about 4% of L Brands’ total Victoria’s Secret portfolio.
In Q1 2019, Bath & Body Works sales grew 13% in comparison to last year, while Victoria’s Secret’s same-store sales continued to spiral downward. In fact, Bath & Body Works’ ongoing climb prompted hedge fund Barington Capital to call on L Brands to separate the fragrance and personal care business from the Victoria’s Secret operation, but that was just the tip of the Brands’ turmoil. Barington Capital also asserted that Wexner was insulated by his personal and business relationships with board members, which in turn weakened the board’s oversight in him as CEO. A month later, L Brands added two independent directors to the company in response.
It was more of the same for Victoria’s Secret in Q2: Net sales were $2.9 billion, down from $2.98 billion last year, and short of analysts $2.95 billion projection. How L Brands will revive Victoria’s Secret is anyone’s guess. The brand synonymous with sex appeal is working to better align its approach to keep step with evolving consumer attitudes on beauty, inclusion and diversity. For starters, there have been personnel changes in the beleaguered division, and the company pulled the plug on its nationally televised Victoria’s Secret fashion show.
In August, Les Wexner acknowledged ties to now-deceased alleged sex-trafficker Jeffrey Epstein, alleging that Epstein had misappropriated over $46 million of Wenxer’s personal wealth. L Brands also disclosed hiring outside counsel to review the company’s relationship with Epstein.
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