L Brands, a Victoria’s Secret parent company plans to close about 250 stores permanently.
L Brands, the parent company of Victoria’s Secret and Bath & Body Works, has announced a 15% cut in its corporate staff.
- L Brands is actively seeking to reduce its costs with a multi-part plan for 2020.
- The company stated it will “work with providers to identify opportunities to reduce the cost of goods.”
- L Brands plans to close about 250 stores permanently.
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The COVID-19 epidemic has caused huge losses for the company because unemployment and closures have caused a huge sales slump.
Plans to raise profits
L Brands is actively seeking to reduce its costs with a multi-part plan for 2020.
In its first phase, the company will lay off 850 people from its headquarters in Columbus, Ohio. Much medium management and marketing staff will be affected.
CEO Andrew Meslow said of the tough choice,
“Decisions regarding our employees are incredibly difficult and not taken lightly, but these actions are essential to keep our company in excellent shape for the long term.”
The company expects to pay $75 million in costs, but it will be a long-term money-saving move. At the same time, the company does not pay those who work in closing stores.
In addition to corporate layoffs , the company helps to increase their profits by limiting locations and reducing production costs.
L Brands plans to close about 250 stores permanently . Epidemic-related closures only hastened with this change – most retail brands are trying to move away from brick and mortar shopping to give more energy to their online customers.
This change saves money in two ways. This saves the costs needed to run a store such as rent and staff.
The company also stated “will work with suppliers to find ways of reducing the cost of merchandise.”
The company’s 2020 performance
L Brands says the changes will help the company save $175 million in fiscal 2020. This is an interesting, but necessary project in the midst of the crisis of closing many retail businesses.
Now, Victoria’s Secret 2020 performance is largely due to drag on the L brand’s profits. The lingerie company has seen a 40% decline this year, with the L brand’s overall revenue down 20% from last year.
Bath & Body Works helped ease the tide, announcing an amazing 10% profit compared to last year.
As many companies call it a departure, L Brands is using cutthroat business practices to deal with this uncertain economic environment.