Fashion retailer L Brands Co. plans to close around 250 Victoria’s Secret stores in North America over the next several months, executives said in its first-quarter earnings call.
The company expects to close more stores in 2021 and beyond. Further, it plans to close 50 Bath & Body Works stores in the U.S. and one in Canada.
According to the company, the decision is to strengthen the foundation of Victoria’s Secret, which is being separated as a standalone company, to manage through the current crisis of coronavirus pandemic.
Stuart Burgdoerfer, L Brands Chief Financial Officer as well as Interim CEO of Victoria’s Secret, said, “we would expect to have a meaningful number of additional store closures beyond the 250 that we’re pursuing this year, meaning, there will be more in 2021 and probably a bit more in 2022.”
The decision comes as the retailer reported a 37 percent drop in its first-quarter sales as almost all of its stores have been temporarily closed since March 17 due to the pandemic. The company also chose not to provide second-quarter or full-year 2020 earnings guidance.
On May 4, L Brands had outlined its go-forward strategy to establish Bath & Body Works as a pure-play public company and to prepare the Victoria’s Secret Lingerie, Victoria’s Secret Beauty and PINK businesses to operate as a separate, standalone company.
L Brands in February had signed a deal to sell 55 percent of Victoria’s Secret to private equity firm Sycamore Partners. Meanwhile, following the virus crisis, they terminated the deal in early May.
The coronavirus lockdown and related crisis has been taking a toll on retailers as majority of stores stay closed across the globe. The retail stores are already facing stiff online competition from industry majors Amazon and Walmart.
Earlier this week, struggling retailer J. C. Penney Co. Inc., which is going through bankruptcy protection, said it plans to permanently close about 242 stores.
Home furnishings retailer Pier 1 Imports Inc. also said it has filed a motion seeking Bankruptcy Court approval to begin an orderly wind-down of its remaining retail operations.
In February, department store chain Macy’s announced its plan to close 125 stores over the next three years.
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