Sales: $4.7 billion for cosmetics and personal care products.
Corporate sales: $12.5 billion.
Key Personnel: Les Wexner, chairman, president and chief executive officer; Stuart B. Burgdoerfer, executive vice president and chief financial officer, L Brands, Inc.; Nicholas P. M. Coe, president and chief executive officer, Bath & Body Works; Charles C. McGuigan, chief operating officer, L Brands, Inc.
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—White Gardenia candle, Lavender Sandalwood body lotion; Victoria’s Secret Beauty—Lip Crayons, Scandalous Dare and Secret Crush fragrances.
Comments: Things aren’t quite so beautiful at L Brands these days. With consumers avoiding shopping malls, the retailer hasn’t been able to adapt. As a result, corporate sales fell 2% last year. Still, the personal care business, Bath & Body Works, reported an increase in sales, and company executives insist that Victoria’s Secret Beauty is now well-positioned to rebound.
Specifically, BBW sales rose 7% and operating income increased 6% on top of a record 2015. The division added 240 new concept stores, which include the White Barn home fragrance. L Brands said net sales increased in most categories, including home fragrance and Signature Collection.
Meanwhile, Victoria’s Secret was reorganized into three separate business units (Victoria’s Secret Lingerie, Pink and Victoria’s Secret Beauty) and the company eliminated swimwear in an effort to focus on core competency and expand the brand around the world, and especially in North America. L Brands acquired 26 Victoria’s Secret Beauty and Accessories stores from its partner in Greater China, while opening five new stores in the region. Meanwhile, L Brands’ retail partners opened 44 Victoria’s Secret Beauty and Accessories stores, bringing the total to 391. The company plans to open an additional 45 to 60 Victoria’s Secret Beauty and Accessories stores in 2017.
For the first quarter of 2017, Victoria’s Secret and BBW suffered a 9% decline in like-for-like sales. L Brands’ revenues fell nearly 7% to $2.43 billion and net income tumbled to $94 million, compared to $152.3 million the previous year.
While CEO Les Wexner remains optimistic about the company’s future, analysts aren’t so sure. While BBW reported comparable sales growth of 10% for the four weeks ended April 29, 2017, Jeffries analyst Randal Konik expects the brand’s appeal to weaken as mall traffic continues to fall. Last month, L Brands said same-store sales fell 7% in May from a year ago.