Recently 'L Brands', the company which owns Bath & Body Works and Victoria Secret, beat Wall Street expectations, primarily due to the continued demand upsurge and success of its Bath & Body Works brand. The brand reported a 13% year-over-year sales growth. L Brands is currently spinning off Victoria's Secret, the brand which witnessed a significant decrease in year-over-year sales of 39%. The Bath & Body Works brand has experienced significantly high growth in its hand sanitizer, soap, body care, and other home fragrance categories.
Recently, the CEO of L Brands Andrew Meslow stated that the success of Bath & Body Work is due to the high demand for soap, sanitizer, body care, and home fragrance products at this time.
According to Menslow, the soap and sanitizer products earlier composed around 15% of the total business, but during the COVID-19 pandemic, these categories have experienced a "tremendous upsurge." Now, the company is planning to continue the momentum beyond the COVID-19 pandemic situation. "We expect that the awareness of health and cleanliness with activities like washing hands, using sanitizers when one cant wash hands, will continue beyond the pandemic situation," Meslow stated.
According to the CEO, body care and hygiene have always been a secure area for the company, specifically as stressed and anxious consumers turn to "affordable luxury products" amid high unemployment rates and an economic recession. "[The body care] business is always important to our customers. It has become even more relevant today as an affordable luxury and a way to treat themselves even when they are unable or unwilling to spend money on other large-ticket products," Meslow stated. "That is an inexpensive way, be it for self-indulgence or to give us a gift."
Bath & Body Works has also benefited from sequestered Americans seeking ways to dapper up their homes with home fragrances. This is a category where the company has doubled down in recent times, even before the COVID-19 pandemic. "Our home fragrance business has grown substantially over the last half-decade, and is becoming important to the people during the pandemic when homes are transforming to be places of work, a place of teaching students or a place of refuge and solace," Meslow stated.
However, L Brands still has an uphill battle as it looks forward to officially spinoff Victoria's Secret into the standalone partner VSNewco. Stuart Burgdoerfer, the interim CEO of VSNewco, stated that struggling brand is finally using the COVID-19 pandemic to recalibrate strategies and offload low performing inventories. "The pandemic has gives us a real opportunity to make substantial changes in the profile of inventory purchases and investments," Burgdoerfer stated. "We always believe that what we do brings us closer to the customer and helps us deliver better fashion, innovative ideas, and better-merchandising fundamentals."