L Brands To Restructure Victoria’s Secret, Cut About 200 Jobs

Shares of L Brands (LB), which owns the Victoria’s Secret and Bath & Body Works brands, is in focus this morning after reporting an increase in March sales and revealing a restructuring at Victoria’s Secret in order to focus on core operations.

MARCH SALES INCREASE: L Brands this morning reported that its same-store sales grew 3% in March, adding that the shift of Easter into March this year from April last year hurt results. The company said Victoria’s Secret March comps were up 2%, as a decline in beauty was offset by growth in PINK and lingerie. Total sales for the month increased 5% to $1.03B for the five-week period from $981.2M in the year-ago period.

WHAT’S NOTABLE: Though the earlier Easter negatively impacted March SSS, L Brands noted on its pre-recorded March sales conference call that April comps will be positively impacted by the shift and are expected to be up low- to mid-single digits.

VICTORIA’S SECRET RESTRUCTURING: In addition to its March sales announcement, L Brands announced this morning that it is restructuring the Victoria’s Secret organization in order to streamline operations and focus more on its core categories. There will now be three business units: Victoria’s Secret Lingerie, PINK and Victoria’s Secret Beauty, and the leaders of each business unit will report directly to company chairman and CEO Leslie Wexner, who also took on the CEO position at Victoria’s Secret in February. Additionally, the company will eliminate certain merchandise categories as it focuses on the areas with the greatest growth potential and the direct business will be integrated within Victoria’s Secret and PINK as the company tries to align this channel with the way customers engage with the brands. The company will cut 200 jobs as a result of the reorganization. Regarding the restructuring, Wexner said the changes are being made “to accelerate our growth and to strengthen the business for the long term by narrowing our focus and simplifying our operating model. I am certain that these changes are necessary for our industry-leading brands to reach their significant potential.”