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Breaking| May 20, 2020, 07:36pm EDT |

Victoria's Secret To Close 250 U.S. And Canadian Stores As Sales Plummet Due To The Coronavirus

TOPLINE

Parent company L Brands said Wednesday it will permanently close 250 Victoria's Secret and PINK stores across the U.S. and Canada as major retailers across the world suffer because of the coronavirus pandemic.

A pedestrian walks past a Victoria's Secret storefront closed and boarded up during the COVID-19 ... [+] 9 crisis on April 17, 2020 in Vancouver, Canada.

Photo by Andrew Chin/Getty Images

KEY FACTS

Victoria's Secret, which has 1,091 stores in the U.S. and Canada, will close 235 U.S. Victoria's Secret stores and three Pink stores, with the rest of the closures taking place in Canada.

L Brands, which also owns Bath & Body Works, reported that net sales during the first quarter of 2020 decreased 37% to $1.65 billion, compared to the same period last year, with almost all of the company's stores forced to close in the final weeks of the quarter because of the coronavirus.

In addition to the 250 Victoria's Secret stores, L Brands is shuttering 50 Bath & Body Works locations.

Victoria's Secret sales were even more dire, falling 46% to $821.5 million, while Bath & Body Works dropped 18%.

The company said it will still move forward with plans to make Bath & Body Works a standalone company.

L Brands shares fell 2% in after-hours trading following the news.

Key background

Even before the pandemic, Victoria's Secret was facing challenges. Former L Brands LB CEO billionaire Les Wexner endured harsh scrutiny for his ties to the now-deceased convicted predator Jeffrey Epstein. It's core image started to be called into question as brands that prioritize size inclusivity have become more popular. A New York Times NYT report in February painted an unflattering picture of executives promoting misogyny inside the company. L Brands stock has fallen more than 75% from its peak in 2015.

In February, L Brands announced a deal to sell a majority stake in Victoria's Secret to Sycamore Partners, a New York private equity firm, but both sides called it off after Sycamore sought to back out of the deal in court in May.

news peg

With the coronavirus forcing store closures across the world, other large retail companies are on the brink of financial disaster. J.C. Penny declared bankruptcy last week and Pier 1 Imports announced Tuesday it will close all its stores. Others can't pay their rent, including Gap, Foot Locker, H&M, Nordstrom JWN and LOFT. Consumer spending—which drives around 70% of the U.S. economy—dropped by 7.5% in March, the steepest drop in history since records began being kept in 1959 according to the U.S. Commerce Department.

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I'm a San Francisco-based reporter covering wealth at Forbes. Follow me on Twitter @rachsandl or shoot me an email rsandler@forbes.com.

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victoria secret singapore closing down

Source: https://www.forbes.com/sites/rachelsandler/2020/05/20/victorias-secret-to-close-250-us-and-canadian-stores-as-sales-plummet-due-to-the-coronavirus/

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