Victoria’s Secret owner reports surprise profit
By: Reuters Editorial | 20 August 2020
Lockdowns appear to have got some shoppers in the mood for lingerie.
L Brands on Wednesday (August 19) reported a surprise quarterly profit, boosted by strong demand for Victoria’s Secret.
Increased online activity led to a 28 percent rise in sales at the underwear brand.
But it was L Brand’s Bath & Body Works’ sanitisers and soaps that were the big winner.
Comparable sales there rose 123%.
Overall the company saw a 63 percent rise in quarterly sales, crushing analyst estimates of an 18% fall.
But the pandemic-fuelled temporary store closures, which have pushed many retailers into bankruptcy, led to 850 jobs cuts at L Brand’s home office.
And there have been permanent closures at some Victoria’s Secret stores, after a stake sale in the unit fell apart.
Much now depends on the fast-approaching holiday season.
L Brands said it was testing ideas to spread its holiday merchandise to a broader time period.
It also forecast “meaningful expense pressure” due to higher store costs that include payroll and supplies.
As well as the implications of social distancing protocols, wage rate inflation and higher shipping costs.