L Brands sales take 37% hit
Having recently said goodbye to founder and former CEO Leslie Wexner, L Brands, Inc., the Columbus, Ohio-based owner of Victoria’s Secret and Bath & Body Works reported a 37.1% decline in revenues for the first quarter on Wednesday.
For the first quarter ended May 2, 2020, the company achieved net sales of $1.654 billion, down from sales of $2.629 billion in the prior-year period, largely due to the fact that the retailer’s stores have been closed since March 17, in response to the ongoing Covid-19 pandemic.
The largest decline was seen at the Victoria’s Secret lingerie brand, where sales fell from $1.5 billion to $821.5 million.
Bath & Body Works saw a less notable decrease, posting sales of $712.7 million, compared to $870.7 million in the same period in the previous year. The brand’s direct business, which continued to operate throughout the first quarter, achieved a year-over-year increase of 85% in sales, which totaled $288.9 million, compared to $156.4 million.
During the period that the brand’s retail locations were open in the quarter, comparable store sales rose 20%.
Overall, L Brands reported a net loss of $296.9 million, or a loss of $1.07 per share, plummeting from net income of $40.3 million, or $0.14 per share, in Q1 2019.
When the company bid farewell to Wexner earlier this month, it also outlined a go-forward strategy for its businesses in the wake of the calling-off of a $525 million deal that would have seen private equity firm Sycamore Partners acquire a majority share in Victoria’s Secret.
L Brands announced that is still planning to establish Bath & Body Works as a separate, pure-play public company, and is working to prepare the Victoria’s Secret and Pink businesses to operate as a standalone company.
Long before the Covid-19 pandemic began taking its toll on retailers, Victoria’s Secret was already struggling with falling sales and an outdated image that had fallen out of step with a rapidly evolving lingerie industry.
Following Wexner’s departure, Bath & Body Works CEO Andrew Meslow took over as CEO of L Brands, while Sarah Nash has stepped into Wexner’s former role as chairman.
In light of the uncertainty caused by the coronavirus crisis, L Brands did not provide financial outlook on Wednesday.
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