Yet another major retail chain is shuttering several stores across North America this year. Victoria's Secret announced to Bloomberg that they are planning on closing down 53 stores in North America this year as sales and store performances decline. The announcement was made today on February 27 by L Brands Inc., which owns the lingerie retailer, according to Bloomberg.
This major move to close down several locations comes after VS stores have been underperforming and sales have been dropping. L Brands Inc. has said that they are now pulling back investments in the lingerie chain that was once highly popular across North America, Bloomberg reports.
L Brands Inc. released a quarterly earnings report for Victoria's Secret today on their website, and it revealed that the lingerie company has been seeing declining profits as well as decreasing share prices. Some have even said that the company is starting to fall apart, according to In Style Magazine. The company's full year profits were disappointing, according to Business Insider.
The report showed that sales for VS stores in the U.S. and Canada in the last quarter of 2018 had dropped to $1,849,300 dollars from $2,038,300 dollars when compared to the same time the year before.
"Given the decline in performance at Victoria’s Secret, we have substantially pulled back on capital investment in that business versus our history," the company said in an earnings commentary, according to Bloomberg.
The number of store closures by Victoria's Secret for 2019 is over triple their average annual amount. In recent years, the brand has closed an average of 15 stores each year, according to Bloomberg. For instance, last year in 2018, around 20 stores were shut down, Business Insider reports.
According to Bloomberg, Victoria's Secret's has been going through struggles as a retailer for the past while and it's not necessarily a secret. Not only have sales been hit, but the brand's reputation has been as well.
Recently, many people have been slamming the chain for various reasons such as failing to be more diverse and showcasing more women of different body shapes and types, In Style Magazine reports.
The 2018 Victoria's Secret Fashion show even had a record low number of viewers. The show attracted 3.27 million viewers, which is the lowest amount since it has started its run, according to W Magazine.
The year before in 2017, 4.98 million people tuned in to watch the show. Not only that, but the show was also met with criticism by many, especially after CMO Ed Razek made controversial comments about why they don't include trans or plus-size models in the show, W Magazine reports.
However, it's not all bad news. Although store sales have been continually declining, the online stores did see an increase in sales by 8% in the last quarter, Bloomberg reports. The brand is also bringing back its swimwear line to online stores this spring, which was met with the excitement of many.
Victoria's Secret is not the first major retailer to shut down several stores across Canada this year. Several chains have filed for bankruptcy or bankruptcy protection lately. For instance, both Payless Shoes and Home Outfitters announced last week that they were closing down all stores in Canada. Town Shoes also closed down all Canadian stores last month in January.
You can view the full fourth quarter and full year earnings for 2018 report by L Brands Inc that was released today on their website.