Victoria's Secret plans to permanently shut down around 250 US and Canadian shops this year, its mother company L Brands disclosed late Wednesday.
L Brands also expects to permanently shutter 50 Bath & Body Works locations in the US and one in Canada, as part of its quarterly earnings, based on partial details the company released online. L Brands will talk about its earnings Thursday morning with market analysts.
The company, popular for its lingerie brands endorsed on catwalks by models, has 849 branches in North America. A big bulk of these stores have remained out of business since March this year, after the coronavirus pandemic ravaged the US economy.
News of the brand's store shutdowns came just a few weeks after L Brands confirmed that an agreement to sell a majority stake in the company to private-equity group Sycamore Partners had fallen through.
Market observers were betting on Sycamore to make a badly needed turnaround of Victoria's Secret and reposition it for the future after many years of dismal revenues.
The retailer, which also owns Bath & Body Works, posted a net loss of $296 million, compared with a profit of $40.3 million from the previous year. Net sales were down 37 percent to $1.65 billion from $2.63 billion from the previous period.
Overall, L Brands' same-store revenues climbed 4 percent, while they rallied 40 percent at Bath & Body Works and fell 12 percent at Victoria's Secret, whose total revenues for the year declined by 45 percent to $821 million.
Even prior to the global health crisis, Victoria's Secret was already hounded with falling sales and demand. Former L Brands chief executive officer Les Wexner endured rigid probe for his connections to the now-deceased convicted felon Jeffrey Epstein.
The group's reputation began to elicit scrutiny as brands that put premium on size inclusivity have turned out be very in demand.
In February, a New York Times report painted an unfavorable image of the big bosses promoting chauvinism inside the organization. Stocks of L Brands have lost over 75 percent from its highs in 2015.
Total revenues of L Brands have fallen 36 percent in the quarter ending May 2. Nearly all of its shops have been shut down since March 17 because of the coronavirus crisis.
The news comes a day after Pier 1 Imports disclosed moves to closed down all its remaining businesses, and two days after JC Penney announced it would shutter 242 locations as part of its bankruptcy plan.
