Below is a look at the company's 2020 highlights, recent acquisitions, best-selling brands, and latest innovations.
$5.3 billion (est.)
- Sarah Nash, chair
- Andrew Meslow, chief executive officer, L Brands and Bath & Body Works
- Stuart Burgdoerfer, executive vice president and chief financial officer
- Bath & Body Works home and personal care
- White Barn and C.O. Bigelow home fragrances
- Victoria’s Secret fine fragrances and cosmetics
- Pink Cosmetics
- Victoria’s Secret Beauty—Bombshell Intense fragrance, Pink Coco Oil conditioning body oil
- White Barn—3-Wick candles, Fresh Lemonade hand soap
L Brands continues to experience a tumultuous series of events. Beyond the company’s below-expectations 2019 financial performance, a promising deal to sell the struggling company announced in 2020 fell apart just months later, and longtime chairman and CEO Les Wexner left the company.
Fiscally, L Brands reported that Victoria’s Secret Beauty experienced a good year marked by a solid holiday performance, with positive low-single digit comparable sales and an improvement in the merchandise margin rate. However, the Victoria’s Secret mother brand underperformed in 2019, with comparable sales declining 7% for the year due to a combination of factors stemming from “a poor assortment” which reduced foot traffic and resulted in increased promotion that negatively impacted margin rates. Despite declines in its other business sectors, L Brands opened 59 new stores in 2019, ending the year with 812 stores outside North America.
In contrast, Bath & Body Works celebrated a record 2019. Sales grew 10%, digital channel sales jumped 32% and operating income increased 11% in comparison to the previous year. By year’s end, L Brands counted more than 800 newly remodeled Bath & Body Works and White Barn stores.
International revenue in 2019 was flat in 2019 compared to 2018, but adjusted operating income increased, driven by growth in the Bath & Body Works franchise business.
L Brands began 2020 with the promise of a sought-after buyout to Sycamore Partners for $1.1 billion but amid the havoc of Covid-19 and an ensuing legal battle, the deal “mutually” collapsed and Sycamore walked away.
Undeterred, L Brands announced it was committing to strategizing the spin-off Bath & Body Works into a standalone public company, and Victoria’s Secret into a standalone, privately held business.
This year has also been marked by a major leadership shakeup. After being dogged by reported ties to convicted sex offender Jeffrey Epstein, Les Wexner stepped down as the company’s longtime CEO and chairman and was replaced by Bath & Body Works’ CEO Andrew Meslow, who will also join L Brands’ board, which is now newly chaired by Sarah Nash who brings with her almost 30 years of investment banking experience at JPMorgan Chase & Co.
After an abysmal Q1 where sales fell nearly $1 billion, to $1.6 billion for the quarter ended May 4 due to the pandemic-related closure of nearly all of the company’s stores, L Brands reported better-than-expected sales for the second quarter of fiscal 2020 despite net sales dropping 20% year-on-year to $2.3 billion. Victoria’s Secret experienced a 39% sales drop, offsetting “exceptionally strong” Bath & Body Works results. Bath & Body Works reported a 13% Q2 sales increase, with direct sales up 191% and sales in brick-and-mortar stores up 87%. All of this on the heels of Q1 results which saw Bath & Body Works sales fall “only 18%” in the first quarter as direct sales rose 85% to nearly $289 million.
In July, the company announced it expected to deliver $400 million in annualized cost reductions through its profit improvement plan for Victoria’s Secret, with approximately $175 million of savings expected to be achieved in fiscal 2020. In the second quarter of fiscal 2020, the company expects to record pre-tax severance costs of approximately $75 million via a 15% personnel reduction, 250 store closures and related inventory and cost management measures.
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