Bethany Biron/Business Insider
Bath & Body Works' sales are soaring.
- Though L Brands is mired in slumping sales due to falling perception of its Victoria's Secret brand, Bath & Body Works continues to shine.
- Bath & Body Works continues to report strong earnings, effectively carrying the struggling L Brands. The personal-goods retailer has found success by playing to the power of nostalgia while staying relevant with updated stores and new product tests.
- We visited one of three Bath & Body Works locations in Manhattan to see what it's doing right.
As L Brands struggles to revitalize its ailing Victoria's Secret brand, Bath & Body Works proves it has enduring appeal.
Best known for its bountiful selection of personal care and bath products, Bath & Body Works has established itself as a bright spot for its parent company. The brand posted a 13% increase in same-store sales in the first quarter of 2019, while sales at Victoria's Secret's stores declined by 5%. Thanks in part to the success of Bath & Body Works, L Brands reported a net income of $40.3 million for the quarter, more than three times the value estimated by analysts.
Investors have started pressuring L Brands to split Bath & Body Works from the struggling lingerie company. In March, hedge fund Barington Capital sent a lengthy letter to L Brands CEO Les Wexner arguing its point for a spinoff, taking a page from the playbook of Gap Inc.'s recent decision to make Old Navy a standalone company.
In the meantime, L Brands made pointed efforts to offset its losses by selling La Senza and closing its high-fashion brand, Henri Bendel. Still, the company's "performance continues to be mixed," L Brands CFO Stuart Burgdoerfer said on the investor call in May.
We visited a Bath & Body Works store in Manhattan's Flatiron District to see what's helping set the retailer apart: