(Filed Under Financial and General Interest News). March sales were flat at Victoria’s Secret and Pink company-owned stores in the U.S. and Canada, while the combined North American store and direct business rose 2% for the month.
Parent company L Brands also announced changes at Victoria’s Secret including the elimination of “approximately 200 Columbus and New York home office associates” and “restructuring the organization into three business units: Victoria’s Secret Lingerie, PINK and Victoria’s Secret Beauty” with the leaders of those units continuing to report to chairman and CEO Leslie Wexner.
Other changes include “Integrating the direct business as a primarily digital channel within the Victoria’s Secret and PINK businesses,” and “Focusing resources on core merchandise categories, where the company believes the greatest growth potential exists. This will involve the elimination of certain merchandise categories.” Victoria’s Secret will also evolve how it “connects with customers through more focus on loyalty programs and brand-building engagement rather than traditional catalogues and offers.”
Said Wexner, “Coming off a record year, now is the best time to make improvements … going from best to even better. We are making these changes 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 … nonetheless, decisions about people are the most difficult ones to make, and we are taking care to support associates who are being affected by these changes.”
In discussing the results, L Brands chief investor relations officer Amie Preston noted “Victoria’s Secret March comps increased 2%, as growth in Pink and lingerie was partially offset by a decline in beauty. The shift of the Easter holiday into March this year from April last year negatively impacted results.” She added that “merchandise margin dollars increased versus last year. The merchandise margin rate was down to last year primarily driven by a decline in beauty as we reposition this category. In addition, margin rate was unfavorably impacted by FX in our Canadian business.”
Preston explained, “In April we will focus on delivering new fashion in our bralettes and Pink Wear Everywhere collection.
Meanwhile, L Brands, which also includes Bath & Body Works, La Senza and Henri Bendel, reported net global sales “increased 5% to $1.027 billion for the five weeks ended April 2, 2016, compared to net sales of $981.2 million for the five weeks ended April 4, 2015.”
The company pointed out that “sales for the five weeks ended April 2, 2016, increased 3% and were negatively impacted by the earlier Easter this year by approximately 1 to 2 points.” L Brands “reported net sales of $1.876 billion for the nine weeks ended April 2, 2016, an increase of 5% compared to sales of $1.787 billion for the nine weeks ended April 4, 2015. Comparable sales for the nine weeks ended April 2, 2016, increased 4%.”
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