Victoria’s Secret isn’t done closing stores.
After closing nearly 250 stores in 2021, Victoria’s Secret will close 30 to 50 more locations this year, parent company L Brands revealed in an investor presentation. As of January 30, there were 703 Victoria’s Secret stores in the U.S., and 143 Pink stores.
L Brands will continue to expand its Bath & Body Works chain, opening 49 U.S. stores in 2021, and one in Canada. (The brand currently has 1,633 U.S. stores.) L Brands is also shifting more Bath & Body Works stores to off-mall locations, where comps are double and operating costs are lower, the company said on its earnings call.
The news came as L Brands swung to a fourth-quarter profit with earnings that topped analysts’ estimates, but sales that missed. L Brands’ net income totaled $860.3 million, or $3.03 per share, compared with a loss of $192.3 million, or $0.70 a share in the year-ago period. Analysts had expected $2.91 per share.
Net sales rose 2.4% to $4.82 billion, missing estimates, in the quarter. Total company sales for the full year were $11.8 billion, down from $12.9 billion in 2019.
L Brands’ total same-store sales rose 10% in the quarter, more than expected. Same-store sales fell 3% at Victoria’s Secret’s and increased 22% at Bath & Body Works. Although sales fell at Victoria’s Secret, the loss was an improvement over the year-ago period when comparable sales fell 10%.
E-commerce sales at Bath & Body Works rose 74% and 33% at Victoria's Secret.
L Brands said it is still planning to spin off Victoria’s Secret into a separate company, with the move to be completed by August. The New York Times reported this week that Goldman Sachs will begin formally pitching buyout firms about a potential takeover as soon as this week.
“Over the next 6 months, we will continue to work toward the separation of the two businesses, proceeding down a dual track to prepare for either a spin-off or a sale,” the company stated. “We continue to believe that we can maximize value for shareholders through a separation and look forward to communicating further details on the opportunities for both of these exceptional businesses as we get closer to the separation.”
The company ended the quarter with 2,920 stores around the world (1,739 Bath & Body Works and 1,181 Victoria’s Secret locations, which includes Pink stores.)