Columbus, OH
www.lb.com

Sales: $7.2 billion for personal and personal care products

Corporate sales: $11.8 billion

Along with the Victoria’s Secret brand as a whole, bestselling fine fragrance Bombshell is getting an update for Summer 2021 with products spanning from an EDP to a body lotion.

Angels just won’t fly with consumers anymore. Last month, Victoria’s Secret announced new partnerships as the brand continues its evolution to inspire women with products, experiences and initiatives that champion them and support their journey. That’s a 180° about-face for a brand that relied on objectifying women to sell its clothing and cosmetics lines. As Victoria’s Secret CEO Martin Waters told The New York Times, “We needed to stop being about what men want and to be about what women want.”

The new partnerships, The VS Collective and The Victoria’s Secret Global Fund for Women’s Cancers, are designed to positively impact the lives of women.

The VS Collective is described as a group of accomplished women who share a common passion to drive positive change. The company said they will influence and shape the future of the Victoria’s Secret brand. The VS Collective includes: Adut Akech, refugee, mental wellness supporter and model; Amanda de Cadenet, journalist, photographer, GirlGaze founder and equality advocate; Eileen Gu, world champion free skier, youth & women’s sports advocate and model; Megan Rapinoe, LGBTQIA+ activist, pay equity crusader, professional soccer player; Paloma Elsesser, body advocate, community creator, model; Priyanka Chopra Jonas, actor, producer, entrepreneur; and Valentina Sampaio, LGBTQIA+ activist, actor, model.

“I am proud and inspired to be part of this brand because I believe in this work and our mission…and know that together we are creating something really beautiful,” said Raúl Martinez, head of creative, Victoria’s Secret.

Among the first initiatives, the founding members of The VS Collective will share their stories in a recurring podcast hosted by award-winning broadcaster Amanda de Cadenet. Each episode will showcase the remarkable experiences and perspectives of a member of The VS Collective, as well as reveal further details of their partnership with the brand.

A great first step, but still a long way to go for beleaguered Victoria’s Secret and its parent L Brands. When the pandemic hit, Sycamore Partners bailed on a deal to purchase the retailer. Since then, the company has been working to shore up its image, spin-off Bath & Body Works, and rebound in traditional retail. Through it all, BBW continued to perform as sales rose 20% to nearly $6.5 billion. Direct channel sales soared 109% to just over $2 billion.

The turnaround gathered steam in the new year. In Q1, Bath & Body Works’ sales nearly doubled to more than $1.4 billion. Corporate sales jumped 83% to over $3 billion. And in May, L Brands said it would separate the company into two independent public companies: Bath & Body Works and Victoria’s Secret. The transaction is expected to be completed next month.

“In the last 10 months, we have made significant progress in the turnaround of the Victoria’s Secret business, implementing merchandise and marketing initiatives to drive top line growth, as well as executing on a series of cost reduction actions, which together have dramatically increased profitability,” said Chair Sarah Nash. “As a result of these efforts, Victoria’s Secret is now well-positioned to operate as a standalone, public company. Further, both Bath & Body Works and Victoria’s Secret are leaders in their respective markets, and, as separate businesses, each will be ideally positioned to benefit from a sharpened focus on pursuing growth strategies best suited to each company’s customer base and strategic objectives.”

Columbus, OH
www.lb.com
Sales: $5.3 billion
$5.3 billion (estimated) for beauty and personal care products. Corporate sales: $12.9 billion

L Brands is a retailer in search of a buyer. Earlier this year, the company announced it would be acquired by Sycamore Partners for $1.1 billion—a fraction of what it was worth a few years ago. But when COVID-19 hit, Sycamore balked and the deal was off. Still, L Brands says it is committed to establishing Bath & Body Works as a pure-play public company and make the cost reductions necessary to operate Victoria’s Secret as a standalone business.

In a few short months, L Brands lost a buyer, lost mall customers and Les Wexner is gone, too. After years of underperformance, capped by reported ties to convicted sex offender Jeffrey Epstein, Wexner stepped down as L Brands chairman and CEO during the annual meeting in May. Sarah Nash is the new L Brands chair. Prior to this appointment, she was a member of the L Brands board of directors. Nash spent nearly 30 years in investment banking at JPMorgan Chase & Co. Andrew Meslow is the new CEO; prior to this appointment, he was BBW’s chief operating officer.

Nash and Meslow step in as things are getting even worse at L Brands. Victoria’s Secret sales have fallen nearly 50% and the retailer is permanently closing about 25% of its North American stores. Coronavirus is making a very bad situation even worse. The company said Q1 sales fell nearly $1 billion to $1.6 billion for the quarter ended May 4. Nearly all of the company’s stores were closed since March 17 due to the pandemic and gradual reopening is taking place.

But scented candles and hand sanitizers (such as BBW’s PocketBacs) are still in demand when consumers are stuck at home. Bath & Body Works’ sales fell “only 18%” in the first quarter as direct sales rose 85% to nearly $289 million. The company noted that BBW’s Q1 comparable sales increased 20% during the period in which stores were open.

That trend, BBW rising and VS falling, was the story last year, too. While corporate sales declined about 2% last year, BBW’s sales rose 10% to $5.1 billion, thanks to gains in all main categories, including home fragrance, body care, soaps and sanitizers. Even comparable store sales of VS Beauty increased in the low single digits, helped along by growth in accessories and Pink Beauty, partially offset by declines in the lip business.

Columbus, OH
www.lb.com
Sales: $5.0 billion

Sales: $5.0 billion (estimated) for cosmetics, personal care and home fragrance products. Corporate sales: $13.2 billion.

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.

Columbus, OH
www.lb.com

Sales: $4.7 billion (estimated) for cosmetics and personal care products. Corporate sales: $12.6 billion for the year ended Feb. 3, 2018.

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.

Columbus, OH
www.lb.com

Sales: $4.7 billion for cosmetics and personal care products.

Corporate sales: $12.5 billion.

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.

Columbus, OH
614.415.7000
www.LB.com

Sales: $4.4 billion for personal care and cosmetics. Corporate sales: $12.1 billion for the year ended Jan. 30, 2016.

Corporate sales rose 6% last year. Sales at Bath & Body Works rose 7% and comparable store sales increased 5%. Both traditional retail and online sales were up on the strength of home fragrance, Signature Collection and soaps and sanitizers. L Brands is in the process of remodeling BBW and opening more BBW/White Barn dual concept locations.

Victoria’s Secret Beauty is a $1 billion business and Wexner noted that it is an entry point for many new Victoria’s Secret customers. As such, the company “took significant steps to improve the business,” he said, “which should grow the Victoria’s Secret business significantly and globally.”

VS Beauty is on its way. The brand is moving away from “fantasy” beauty products to fine fragrances and high-end body care items. The brand is moving into Asia too. Last year, L Brands had 24 Victoria’s Secret Beauty and Accessories stores in China and more are on the way.

In April, L Brands said it would create three units within its Victoria’s Secret business (Victoria’s Secret Lingerie, Pink and Victoria’s Secret Beauty) and eliminate certain merchandise categories such as swimwear. The changes are aimed at narrowing the company’s focus and simplifying the operating model, according to Wexner. The move includes eliminating about 200 jobs between its New York City office and headquarters in Columbus, OH. Other changes include integrating the online business, so it no longer operates as a separate unit from stores.

The restructuring was the first major change implemented since L Brands CEO and founder Leslie Wexner when he took over as CEO of  the Victoria’s Secret business in February—a position that he ultimately plans to relinquish.

“Coming off a record year, now is the best time to make improvements, going from best to even better,” Wexner said in a company statement. “I am certain that these changes are necessary for our industry-leading brands to reach their significant potential.”

In May, the company hired Jan Singer to run its Victoria’s Secret business. Singer will join the company in September. Until then, Wexner will continue to oversee the business, something he’s done since Sharon Turney left the company early in 2016.

Also in May, the company brought in Greg Unis to run the Victoria’s Secret Beauty business.

Columbus, OH
614.415.700
www.lb.com

Sales: $3.3 billion for personal care and cosmetics. Corporate sales: $11.4 billion for the year ended Feb. 1, 2015.

Corporate sales rose 6% last year, as did sales for Bath & Body Works (BBW), which calls itself the largest specialty retail beauty brand in the world. L Brands maintains that BBW holds the No. 1 spot in the US for several categories, including body lotion brand, shower gel brand, fine fragrance mist, fragrance collection (Japanese Cherry Blossom), home fragrance diffuser (Wallflower), liquid hand soap brand, hand sanitizer brand, spa collection and aromatherapy collection. To maintain momentum, more than 85 remodeling jobs in the works for Bath & Body Works, including White Barn. In 2014, BBW added 30 franchise stores including new locations in Asia and Latin America. This year, L Brands expects to add 50 new stores.

It was a different story for the Victoria Secret CFT business. Victoria’s Secret beauty sales declined due to the elimination of Victoria’s Secret makeup. Despite de-emphasizing cosmetics, the company insists three Victoria’s Secret fragrances—Bombshell, Heavenly and Tease—rank among the top 10 fragrances in the US. Last year, the company added 101 Victoria’s Secret Beauty & Accessories stores, bringing the total to 299 at the end of fiscal 2014. This year, the plan calls for adding as many as 125 new VSBA stores, including nine in China alone.

Its heritage is bricks and mortar, but L Brands does nearly $2 billion in online sales. Bath & Body Works Direct grew 18% last year and has a five year CAGR of 20%. During the year L Brands continued to expand BBW and Victoria’s Secret Beauty with partners around the world.

For the first quarter ended May 2, 2015, corporate sales rose 5% to $2.5 billion. BBW’s sales rose 4% during the period to $613 million, according to L Brands.

Columbus, OH

614.415.7000

www.lb.com

Sales: $3.2 billion (estimated) for home fragrance and personal care products. Corporate sales: $10.7 billion. Net income: $903 million for the year ended Feb. 1, 2014.

Corporate sales rose less than 3%. Bath & Body Works’ sales rose less than 1%, but while retail store results were flat, sales within Bath & Body Works Direct rose 16%, driven by increases across all categories, including Signature Collection, home fragrances and soaps and sanitizers. The company continues to expand, beautifully. During the year, 90 Victoria’s Secret Beauty and Accessories stores were opened, bringing the total to 198. Approximately 100 more of these franchise-operated units are expected to open this year. B&BW franchisees opened 17 stores last year, bringing the total in the Middle East, Latin America and Eastern Europe to 55. About 25 more of these units are expected to open in 2014.

For the first quarter ended May 3, 2014, corporate sales rose 5% to more than $2.2 billion. Bath & Body Works’ sales rose more than 3% to $581.6 million. Sales of Victoria’s Secret Beauty and B&BW International jumped 75% to $71 million.

But in a May conference call with analysts, Victoria’s Secret CEO Sharen Turney said the company is phasing out its Victoria’s Secret Makeup business.