L Brands shuttering Henri Bendel
- L Brands on Thursday announced the closure of all 23 stores and the e-commerce site of its upscale Henri Bendel women's apparel banner, which has been open for 123 years.
- The stores, including the Fifth Avenue flagship as well as smaller-format stores in 11 states, are set to close in January but will have new merchandise for the holidays, according to a company press release.
- The company estimates that Henri Bendel 2018 revenue will reach $85 million and its operating loss will be $45 million, excluding closing costs, which the company is in the process of determining.
L Brands CEO and Chairman Leslie Wexner is no stranger to cutting his losses when it comes to apparel retail, having sold off his first endeavor, The Limited, in 2007 after 44 years in business.
"We are committed to improving performance in the business and increasing shareholder value. As part of that effort, we have decided to stop operating Bendel to improve company profitability and focus on our larger brands that have greater growth potential," he said in a statement Thursday. "This decision is right for the future growth of our company, but not easy because of the impact to our L Brands family."
Store associates who remain through the holidays will get retention bonuses, and later can interview for open positions within the company or receive separation pay and job search support services, the company said.
The move is "a step in the right direction" in terms of shareholder value "and will allow management to focus on its core brands," according to a note emailed to Retail Dive by B. Riley FBR analysts led by Susan Anderson. "[W]e believe management could pursue the sale or closure of other brands in the portfolio and will likely continue to address plans to increase shareholder value."
Despite the struggles of L Brands flagship Victoria's Secret banner, Anderson noted that though the banner "remains a work in progress, we believe the brand still highly resonates with consumers," and that its Bath and Body Works unit "continues to outperform."
Victoria's Secret second quarter comp sales (including e-commerce and stores) fell 1% after falling 14% a year ago and at Bath & Body Works rose 10%. In stores only, comps at Victoria's Secret fell 5% and at Bath & Body Works rose 7%, the company said. The company lowered its guidance for 2018 full-year earnings to between $2.45 and $2.70 per share, down from its previous forecast for between $2.70 and $3.00, and said it expects third quarter earnings between zero and 5 cents per share.
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