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current news

VS, Pink Comps -6%; La Senza Sale Closed


(Filed Under Financial and General Interest News). Victoria’s Secret and Pink December comparable store and direct sales in the U.S. and Canada fell 6%, following a 1% decline for the brands in December 2017.

Parent company L Brands also announced today that it had closed the previously announced sale of its La Senza lingerie business, mainly operating in Canada, to “an affiliate” of Beverly Hills-based private equity firm Regent LP, on January 6, 2019.

Comparable store sales (without the direct business added in) registered a decline of 8% for VS and Pink in December 2018, compared to a decline of 6% in December 2017. L Brands’ chief investor relations officer Amie Preston said simply that the contraction at the two brands was “driven by a decline in lingerie and Pink.” She added, “the merchandise margin rate was down significantly to last year, driven by increased promotional activity. January will begin with a continuation of our semi-annual sale. At the end of the month we will focus on Valentine’s Day.”

A spokesperson at Regent declined this week to provide BODY any information about its future plans for La Senza. But the original announcement of the sale did suggest that Regent might not operate the chain forever. L Brands stated in the mid-December 2018 release, it had reached a “definitive agreement to transfer ownership and operating control of La Senza – inclusive of the home office organization, North American stores and e-commerce and international partnerships,” adding that it was selling “100 percent of its assets in La Senza in exchange for the buyer’s agreement to assume La Senza’s operating liabilities and to provide L Brands potential future consideration upon the sale or other monetization of La Senza, as defined in the agreement.”

As of January 5th, L Brands reported it was operating 130 company-owned La Senza stores, 118 of which were in Canada and 12 in the U.S. Interestingly, L Brands had added seven of those U.S. stores since February 3, 2018, after opening its first U.S. La Senza shops in 2016. In addition to the company-owned stores, there are others owned by franchisees around the world. As of November 3, 2018, an L Brands’ chart showed 186 of those shops.

L Brands had reported it was losing money on the chain. “The company estimates that La Senza’s 2018 revenues and operating loss will be approximately $250 million and $40 million (approximately $0.12 per share), respectively.”

Regent itself does not appear to have extensive expertise in the lingerie field. In a joint press release with L Brands it described its current investments as including Sassoon, the hair dressing chain, Sunset Magazine and Lillian Vernon, the online and catalog retailer of household, children’s and fashion accessory products. It also owns “a media portfolio comprised of 18 newspapers, magazines and television platforms including Military Times, Army Times, Navy Times, Defense News.”

L Brands as a whole, which includes Bath & Body Works, “reported net sales of $2.477 billion for the five weeks ended January 5, 2019, compared to net sales of $2.516 billion for the five weeks ended December 30, 2017. Comparable sales were flat for the five weeks ended January 5, 2019, compared to the five weeks ended January 6, 2018. The company reported net sales of $12.457 billion for the 48 weeks ended January 5, 2019, compared to net sales of $11.592 billion for the 48 weeks ended December 30, 2017. Comparable sales increased 3 percent for the 48 weeks ended January 5, 2019, compared to the 48 weeks ended January 6, 2018.”

L Brands added that it “expects to report adjusted fourth quarter earnings per share towards the higher end of its previous guidance of $1.90 to $2.10, not including a preliminary estimated pretax charge, principally non-cash, related to the sale of La Senza of approximately $80 million, or $0.15 per share.” — NM


more Financial and General Interest News >>

Published 01-10-2019 by Nick Monjo

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VS, Pink Comps -6%; La Senza Sale Closed
John Mehas Named CEO of Victoria’s Secret
‘Everything Is On Table’ At Victoria’s Secret
VS Parent Will Report Rare Quarterly Loss
Sale Or Closure May Be Coming For La Senza
Victoria’s Secret, Pink August Comp Sales -5%


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