Sales: $4.7 billion (estimated) for cosmetics and personal care products. Corporate sales: $12.6 billion for the year ended Feb. 3, 2018.
Key Personnel: Leslie H. Wexner, chairman and chief executive officer; Charles C. McGuigan, chief operating officer; Stuart B. Burgdoerfer, chief financial officer and executive vice president; Nicholas Coe, chief executive officer, Bath & Body Works; Martin Waters, chief executive officer, international.
Major Products: Bath & Body Works home and personal care; White Barn home fragrances; Victoria’s Secret fine fragrances and cosmetics.
New Products: Bath & Body Works—Hello hand sanitizers; Black Cherry, Fresh Lemonade, More Summer Please, You Shine Bright, Life is a Peach, Cucumber Melon, Coconut Colada, Island Margarita, Lakeside Afternoon, Endless Summer, Oh Happy Day, You Shine Bright, Life is a Peach, Georgia Peach foaming hand soaps; Black Cherry Merlot, Rainforest Passionfruit, Tea & Lemon, Cannoli & Chocolate, Rose Water & Ivy three-wick candles; Victoria’s Secret Beauty—Bombshell fragrances.
Comments: While corporate sales rose less than 1%, Bath & Body Works (BBW) sales increased 8% last year to more than $4.1 billion, driven by 2% store comp and a 24% increase in sales in the direct channel. CEO Leslie Wexner credited the increase, in part, to a refined product mix. Through new products and relaunches, BBW improved its assortment, created a large amount of newness and learned even more about its customer and what she wants most. L Brands ended the year with more than 1,600 BBW company-owned stores in the US and Canada. This year, BBW North America is expanding its square footage by about 3% through the opening of approximately 30 net new BBW stores and remodeling of existing stores. In addition, BBW has 185 stores in more than 30 countries operating under franchise, license and wholesale arrangements. L Brands reported that www.BathandBodyWorks.com continues to exhibit significant year-over-year growth.
“Not many of the businesses that were around when I began my career (1963) are still around today,” Wexner wrote in his chairman’s letter. “Why? Because those businesses didn’t stay close enough to their customer…and they failed to change.”
The upheaval in retail and the #MeToo movement have women rethinking how to shop and what is sexy (to borrow an old Victoria’s Secret slogan). The result is that the VS lingerie business continues to decline. The fall hasn’t damaged the VS beauty business, however. Sales increased in the low-single digit range as consumers responded to a more edited assortment and new and better merchandise. Through its partners, L Brands closed the year with 397 Victoria’s Secret Beauty and Accessories stores in more than 70 countries. Focusing on China, L Brands operated 29 company-owned Victoria’s Secret Beauty and Accessories last year and expects to open 10 more in 2018.
“We are gaining momentum,” asserted Wexner.
Analysts aren’t so sure. The company reported May sales increased 10% to nearly $852 million. For the quarter, sales were up 8% to more than $3.4 billion. That’s good, but observers say Victoria’s Secret is leaning heavily on promotion to drive traffic. That’s hurt the bottom line now and for the foreseeable future, as the company slashed its earnings projections for 2018.
“The dark store environment, the conspicuous sexuality of the offer, and the brash marketing are increasingly out of step with what modern consumers want,” GlobalData retail managing director Neil Saunders said about Victoria’s Secret in an interview with USA Today.
Recently, Bath & Body Works’ iconic Cucumber Melon won the Hall of Fame award at the 2018 Fragrance Foundation awards.