Dozens of Victoria Secret stores in North America are facing foreclosure, following the lingerie chain’s recent poor financial performance.
The announcement comes after the release of owner L Brands’ fourth-quarter results, which revealed in-store sales were down by 7% during the holiday quarter, which resulted in a major loss.
Because of this, as many as 53 stores in North America will be closing due to the decline in performance, which is more than three times the 15 stores it historically closes in an average year, a spokesperson from L Brands confirmed to Daily Hive.
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“We close stores every year. So that’s an ongoing part of running the business. How we go about it is we look at current and projected performance, sales, profit, cash flow. We look at trade area dynamics and how store openings and closings affect nearby stores and, to a lesser extent, our online business,” said Stuart Burgdoerfer, L Brands CFO.
“And based on those historic and projected results not just for the store in question but for nearby stores, we make judgments about what the projected sales profit cash flow results would be also in relation to what it may cost to exit a store. And based on those criteria, we close stores.”
The company has not publicly identified which specific stores will be closing, but L Brands said the closing stores represent less than 5% of the total store count at this time.