Sales: $5.0 billion
Sales: $5.0 billion (estimated) for cosmetics, personal care and home fragrance products. Corporate sales: $13.2 billion.
Key Personnel: Leslie H. Wexner, chairman and chief executive officer; Stuart Burgdoerfer, executive vice president and chief financial officer; Charles C. McGuigan, chief operating officer, L Brands and chief executive officer, Mast Global; Shelley B. Milano, executive vice president and chief human resources officer; James Bersani, president, real estate; Greg Unis, chief executive officer, Victoria’s Secret Beauty; Nick Coe, chief executive officer, Bath & Body Works; Martin Waters, chief executive officer and president, L Brands 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—Gingham fragrance collection, Pineapple Mango 3-Wick Candle, Flaming Beach 3-Wick Candle, Waikiki Beach Coconut Shower Gel, Bali Coconut Sands Super Smooth Body Lotion, Tropical Vanilla & Cherimoya Protective Hair Perfume, Mango Mai Tai Gentle Foaming Hand Soap, Bahamas, Passionfruit & Banana Flower Fine Fragrance Mist, Fiji White Sands Shea Butter Hand Cream, Banana Cabana 3-wick candle, Nourishing with Coconut Peel Off Face Mask, On The Waves body care collection, Signature Collection Wild Strawberry; Victoria’s Secret Beauty—Eau de Parfum Rollerballs, Fragrance Mists, Fragrance Lotions, In Bloom Fragrance Mists.
Comments: L Brands, like so many other retail groups, is a mess. Corporate sales declined 5% last year, but Bath & Body Works, the company’s home fragrance and personal care unit, recorded gains of nearly 10%. To right the corporate ship, L Brands announced the closing of all 23 Henri Bendel stores as well as the Henri Bendel e-commerce website. This included the company’s Fifth Avenue store as well as smaller-format stores in 11 states, according to company executives.
“We have decided to stop operating Bendel to improve company profitability and focus on our larger brands that have greater growth potential,” said Leslie Wexner, chairman and CEO of L Brands. “This decision is right for the future growth of our company, but not easy because of the impact to our L Brands family.”
In December, L Brands signed a definitive agreement to transfer ownership and operating control of La Senza to an affiliate of Regent LP, a global private equity firm. The company sold 100% of its assets in La Senza in exchange for the buyer’s agreement to assume La Senza’s operating liabilities and to provide L Brands potential future consideration upon the sale or other monetization of La Senza, as defined in the agreement.
Other significant changes made in L Brand’s business include the reduction of its regular dividend by half to normalize the payout and free up capital to reduce debt levels and invest in the business; the promotion of Amy Hauk to run Pink and the appointment of John Mehas to lead Victoria’s Secret Lingerie; new beauty product launches; more disciplined and proactive management of inventory, expenses, real estate and capital structure and heightened focus on merchandise assortments at Victoria’s Secret Lingerie and Pink, including a review of all aspects of brand marketing and communications.
“No question, our recent overall performance has been unacceptable, and we are determined to do better,” admitted Wexner. “There is no group of people more capable of overcoming the challenges we face and accomplishing our goals than the L Brands team. By disciplined execution of our strategy, focusing on the fundamentals, staying close to our customers and leveraging the strength of our brands, we are focused on meeting or exceeding the expectations of our stakeholders—customers, associates and shareholders.”
Bath and Body Works, although comparatively smaller than Victoria’s Secret, is the secret weapon of L Brands. Boasting more than 1,600 doors, mostly in malls and with average square footage at least double the size of most of its competitors, Bath & Body Works posted impressive gains of 7% and 13% in the beauty and home fragrance markets, respectively, in 2018. While Victoria’s Secret’s same-store sales continue to plummet, Bath & Body Works is thriving: its first quarter same-store sales in 2019 were up 13% compared to last year.
BBW is performing so much better than L Brands that hedge fund Barington Capital requested the company split the fragrance and personal care operations from the lingerie business.
“Victoria’s Secret’s brand image is starting to appear to many as being outdated and even a bit ‘tone deaf’ by failing to be aligned with women’s evolving attitudes towards beauty, diversity and inclusion,” Barington wrote.