L Brands will lay off 850 people from its Columbus, Ohio, headquarters.
The layoffs are part of a wider cost-cutting effort the company says will result in $400 million in annualized savings, $175 million of which will be achieved in the fiscal year 2020.
Other cost-cutting measures include moving forward with a previously announced plan to close 250 stores, managing its inventory with “discipline”, and “working with suppliers to identify opportunities to reduce merchandise costs.”
The company expects net sales for the second quarter to be down 20% compared to last year, driven primarily by a 40% decline at Victoria’s Secret.
Though sales are still down overall, Bath & Body Works is a bright spot with a 10% increase.
Coronavirus closures have taken their toll on big-name apparel retailers. JCPenny, Neiman Marcus, J Crew, Brooks Brothers, Lucky Brand, and Ascena Retail Group— which owns LOFT, Ann Taylor, Lane Bryant, Lou & Grey, and Justice—have all filed for bankruptcy protection during the pandemic.
Even before the pandemic, Victoria’s Secret was facing challenges. Former L Brands CEO billionaire Les Wexner endured harsh scrutiny for his ties to the now-deceased convicted predator Jeffrey Epstein. The company’s core image was called into question as brands that prioritize size inclusivity has become more popular. L Brands stock has fallen more than 75% from its peak in 2015.