Victoria’s Secret to close hundreds of stores this year; more to come
The struggling Victoria’s Secret chain plans to close at least 250 stores this year as sales for the lingerie chain continue to fall.
In its first-quarter earnings report, Victoria’s Secret parent company L Brands said it will close 251 of its 921 North American Victoria’s Secret stores this year in anticipation of selling the brand.
That number is likely to rise, Victoria’s Secret interim Chief Executive Officer Stuart Burgdoerfer said on a conference call with analysts Thursday.
“We think there will be more store rationalizations over the next several years,” Burgdoerfer said.
L Brands also said it will close 51 stores in its other main division, Bath & Body Works.
L Brands announced the closings as part of its first-quarter earnings. During the quarter, L Brands lost $296.8 million, or $1.07 a share, compared with a profit of $40.4 million, or 14 cents a share, a year earlier.
Revenue fell almost $300 million, driven by a 45% drop in Victoria’s Secret sales.
In the conference call, Burgdoerfer and new L Brands CEO Andrew Meslow said they are working aggressively to separate the operations of Victoria’s Secret and Bath & Body Works in anticipation of selling the lingerie line.
“We are engaged in a complete comprehensive detailed review of our entire home office organization,” Burgdoerfer said. “We expect that work to be concluded, or largely concluded, by the end of the second quarter.“
A deal to sell 55% of the chain to the retail investment firm Sycamore Partners for $525 million fell through this month after the fallout from the coronavirus pandemic led to L Brands closing its stores.
Burgdoerfer and Meslow said a sale of Victoria’s Secret may or may not take a similar shape as the failed Sycamore deal, suggesting that L Brands might not have a hand in Victoria’s Secret after the sale.
Despite missing analysts’ forecasts for the quarter, L Brands stock rose Thursday, closing up 18.3% at $14.46.