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I Will Never Buy L Brands

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@rollandthomas
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L Brands, Inc. operates as a specialty retailer of women's intimate and other apparel, personal care, and beauty and home fragrance products. The company operates in three segments: Victoria's Secret, Bath & Body Works, and Victoria's Secret and Bath & Body Works International.

Several years ago, L Brands is said it was exiting Victoria’s Secret swimsuit business after the company deemed the swimsuit business as a “non-core” category, but instead in recent years, decided to put energy and resources into that part of the business.

What L Brands should of did was exit not only the swimsuit business, but the lingerie business as well. Yes, I know Victoria’s Secret is a world renowned brand, but customers are no longer loyal to the brand because there are so many options to choose from. Case in point, I can tell you when the last time I was in a Victoria’s Secret store feeling awkward buying my wife something.

L Brands has struggle alongside Victoria's Secret. The lingerie retailer has missed key fashion trends and the competition continues to eat into its market share as many of their startup competitors are online and are in front of the customer first.

True&Co makes bras for women. Because the company has this community of women, all they do is listen to what the community wants and makes different kinds of bras and underwear that are soft, stretchy, supportive, pretty, comfortable etc.

Then there is LIVELY, which was started by a former senior merchant for bras at Victoria's Secret. According to the company’s website, LIVELY is inspired by what we believe makes women sexy today; smart, healthy, active and outgoing. They are going the Lululemon route by making bras and undies that cross the boundaries of lingerie, active, and swim in what they call Leisurée.

A couple of months ago, L Brands reported their first-quarter earnings which saw sale chopped by 50%. Now COVID-19 had a lot to do with it, but the company is like an open wound that keeps bleeding. However, during the report, L Brands said it is 250 of its Victoria's Secret and Pink stores in North America and Canada this year. They also mentioned that they were committed to separating Bed & Body Works as a separate public company into increase shareholder value.

Bath & Body Works has pretty much been the only thing that has grown for L Brands, reporting same-store sales growth
for the past few years while Victoria's Secret has declined. Last year, comps jumped 10% at the soap company but tumbled 7% for the lingerie business, an even worse spread than the year before.

Even so, Victoria's Secret still represented the majority of L Brands revenue, accounting for over 52% of the total.

Although that's slightly worse than the 56% it represented in 2018, it still means that after selling the lingerie company to the private equity firm, L Brands will lose a good portion of its revenue, though it will still have Bath & Body Works' $5.2 billion in sales.

Source

Yes, their once before annual swimsuit / lingerie show that was televised on TV was good to look at, but their declining financial numbers over years has been an eye sore. Thus, I will never, ever entertain buying L Brands and think the company will retest the monthly demand at $10.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.

Posted Using LeoFinance