L Brands to Lay Off 15% of Corporate Workforce
L Brands, parent company of Victoria's Secret, Bath & Body Works, and PINK, said earlier this week that it's preparing to cut 15 percent of its corporate workforce, or about 850 jobs, in a bid to trim costs as its business takes a hit from the coronavirus pandemic. The company said it hopes to save about $400 million annually through its cost-cutting efforts, which include the layoffs. Other cost-cutting measures include closing stores, slimming down inventory, and negotiating with landlords for rent relief, the retailer said Tuesday.
Total Retail's Take: With its stores closed for the majority of the second quarter, L Brands forecasts total net sales for the quarter to come in about 20 percent lower than a year ago, despite a roughly 10 percent increase at Bath & Body Works. The company is expecting to post a 40 percent decline at Victoria’s Secret. The struggles of Victoria's Secret have weighed down L Brands, and the company is seeking to cut costs in order to strengthen its bottom line. The company's struggles withstanding, there is a sense that a leaner company will be able to rebound given its strong buy-in from consumers.
“It’s a classic example of a brand that stretched too far in pursuit of growth,” said BMO Capital Markets analyst Simeon Siegel. “But its revenues are the confirmation it still has tremendous buy-in from consumers.”