(Filed Under wholesale Lingerie News). Comparable store sales in April at Victoria’s Secret and Pink shops in the U.S. and Canada declined 3%. For the combination of its comparable North American lingerie stores and its direct business, the decline in April was 1%.
The 3% decline in April at the lingerie stores comes after the company reported flat sales at comparable Victoria’s Secret and Pink North American stores in March.
In addition, L Brands revealed in a charts accompanying its April sales release that it had “acquired” 26 Victoria’s Secret Beauty and Accessories (VSBA) stores from its outside partners. Up through the beginning of April, all these usually 1,000 square foot stores, which carry some Victoria’s Secret underwear but focus on the company’s fragrances, body care and accessories, had been owned by partners, not L Brands itself.
On its website, L Brands currently lists 34 VSBA stores South America, 76 in the Middle East, 78 stores in Europe, 103 stores in Asia, 4 stores in Africa and 23 stores in Australia/Oceania. To date there has been no other public announcement about this acquisition, which took place in the last month or so, but an L Brands spokesperson, in response to questions from BODY, replied in an email, “You are correct that this is a shift. We will formerly and more fully announce the ownership on our earnings call later this month.” The company did not reveal the location of the VSBA stores that it acquired. Locations include both airports and malls throughout the world.
In announcing the April sales results, Amie Preston, chief investor relations officer declared of the combined monthly results, “Victoria’s Secret April comparable sales were down 1% to last year. Strength in the Pink business was offset by softness in core lingerie and beauty. The merchandise margin rate was down to last year primarily driven by a decline in beauty as we reposition this category and higher Secret Reward redemptions. In addition, margin rate was unfavorably impacted by FX in our Canada business.”
Preston noted, “In May we will focus on Mother’s Day and new fashion in our Pink floral lace halter.”
She added, speaking of L Brands as a whole, “we expect May comps to be roughly flat, which includes a negative impact from the shift of the Sunday and Monday of Memorial Day weekend into June.”
For parent company L Brands as a whole, which also includes Bath & Body Works, La Senza and Henri Bendel, the combined results showed flat April comparable store sales for its U.S., Canada and U.K. stores. A combination of that business and its combined direct business in April showed a 1% increase over last year.
L Brands does not separately report the sales results for its company-owned La Senza lingerie stores in Canada, but it has been gradually reducing the number of locations in recent years. Between January 31, 2015 and January 2, 2016 it reported in had closed 16 La Senza Canada lingerie stores, dropping the total to 130. Since then additional stores have been closed, reducing the total to 125 as of April 30. As of January 31, 2009 the company had been operating 322 La Senza stores and 1,043 Victoria’s Secret stores. Outside of North America partners currently operate 217 additional La Senza shops.
Despite the softness in sales for the North American lingerie stores in March and April, L Brands reported that comparable lingerie store sales in the first quarter of 2016 were up 1%, due to a strong February. A combination of the comparable store lingerie sales in North America along with the direct lingerie business showed a 2% increase in the first quarter.
Total Victoria’s Secret and Pink store sales rose to $1.38 billion in the quarter compared to $1.35 billion in 2015. Total direct Victoria’s Secret and Pink sales rose to $359.7 million from $338.3 million in the quarter.
L Brands reported that its company-wide “net sales increased 2% to $737.5 million for the four weeks ended April 30, 2016, compared to net sales of $724.6 million for the four weeks ended May 2, 2015. Comparable sales for the four weeks ended April 30, 2016, increased 1%.”
“The company reported net sales of $2.614 billion for the first quarter ended April 30, 2016, an increase of 4% compared to sales of $2.512 billion for the quarter ended May 2, 2015. Comparable sales for the first quarter ended April 30, 2016, increased 3%. The company expects to report adjusted first quarter earnings per share at the high end of its previous guidance of $0.50 to $0.55.”
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