Victoria’s Secret Closings Add to Weak Malls’ Woes
The lingerie giant is tightening the purse strings, with plans to shutter 53 stores in North America, on the heels of other recent bankruptcy and store closing announcements.
A Victoria’s Secret retail store
After another national brand announced the closure of dozens of stores nationwide, struggling, vulnerable malls once again braced for another hit.
L Brands Inc., the parent company of Victoria’s Secret, announced in an investors’ return call yesterday that the lingerie chain would be closing 53 stores in North America, after a disappointing fourth quarter in 2018. Following the announcement, stock prices of L Brands Inc. plummeted 8.9 percent, reported Bloomberg.
With the store closures, Victoria’s Secret will lose about 3 percent of its square footage in North America. The company has been struggling for a while—last August, the company announced they were planning to close 20 stores in 2018, after a dip in sales put pressure on the brand.
The day after the Victoria’s Secret announcement, J.C. Penney announced in a fourth quarter and fiscal 2018 earnings report Feb. 28 that it will close 18 underperforming stores, as well as nine home and furniture stores.
Both announcements come on the heels of a year that saw Sears file for bankruptcy, Toys “R” Us close nearly all of its 800 stores after filing for bankruptcy in 2017 and Payless ShoeSource announcing its bankruptcy filing last week.
Bouncing back
However, despite the dark clouds, some of the suffering brands are being revived while others are posting positive numbers.
Earlier this month, Sears was pulled out of bankruptcy and avoided liquidation after its chairman Eddie Lampert purchased the company for more than $5.2 billion, which will keep about 400 stores open and about 45,000 Sears workers employed.
Just this week, a report from Econoday’s Redbook found that same-store sales at U.S. retailers grew by 5.2 percent year-over-year for the week ending Feb. 23. The report pointed to a retail sales momentum that is continuing, but the pace is slowing down: the number is down significantly from a recent peak of 9.3 percent growth for the week ending Dec. 29.
Image via Flickr Creative Commons user Mikofox
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