WASHINGTON — Bath & Body Works is right-sizing its laundry offerings to better focus on core product categories.
The specialty retailer had expanded its laundry category with the debut of dryer sheets in September, about a year after it rolled out its broader fabric care offerings — including detergent and scent boosters — to all U.S. stores.
But the company is now thinking through whether or not it needs to be focused on such adjacencies beyond its core product offerings, CEO Daniel Heaf told an audience at the Semafor World Economy event on Wednesday.
“Not many people come to the mall and buy laundry detergent,” the chief executive said, adding that previous leaders at Bath & Body Works thought it would be a great idea to enter such an attractive category. Heaf joined the specialty retailer as CEO last May after a long career at Nike.
“But you have to ask yourself as well whether you have the right to win in a category like that,” Heaf said at the conference. “What happened actually was it took all the marketing and product development money away from our core categories, which meant our core categories have not kept pace with the consumer while we have been focused elsewhere.”
The executive’s remarks come about a month after Bath & Body Works reported fourth quarter net sales decreased 2.3% year over year to $2.7 billion and net income dropped 11% to $403 million. The company is undergoing a transformation effort that will take time, Heaf said in a March statement.
For the full fiscal year, the retailer’s total sales in U.S. and Canadian stores grew while its direct digital sales in both countries dropped.
The company is now focusing more on meeting customers wherever they shop, whether that’s online or in stores, Heaf said Wednesday. The retailer had historically treated its e-commerce website as more of a catalog for store customers versus a selling channel, he added.
“The strategy overall for Bath & Body Works is to be where the consumer is,” Heaf said on stage. “We don't lead with channel, we lead with the consumers and I think I am bullish on physical retail ... Running two and a half thousand profitable stores is not easy, but we must get into the business of running a serious digital business that inspires and connects consumer journeys together.”
For Bath & Body Works, that means even meeting the consumer on external e-commerce platforms. The retailer expanded its digital presence under Heaf's leadership with the debut of a curated product selection on Amazon in the U.S. in February.
"There are different consumers in different channels, and there are different reasons to shop in different channels," the executive said on Wednesday. "And it's really interesting to see that the SKUs that have underperformed in our stores are outperforming on Amazon, which teaches me that it is truly an incremental consumer and the consumer on Amazon is prepared to pay more than the consumer in our stores because they want fast, free, next-day shipping."
