L BRANDS PROVIDES ADDITIONAL UPDATE RELATED TO COVID-19 PANDEMIC
March 27 2020 - 1:18PM
L Brands, Inc. (NYSE: LB) today provided additional updates on
actions it is taking, following its initial March 17, 2020
announcement related to the novel coronavirus pandemic (COVID-19).
Store and Direct OperationsOn March 17, 2020, L
Brands announced the temporary closure of all Bath & Body
Works, Victoria’s Secret and PINK stores in the United States and
Canada through March 29, 2020. Associates will continue to receive
pay and benefits through April 4, which is one week longer than
originally announced.
Based on the continued spread of COVID-19 and
stay-at-home orders by government officials across the country, the
company is extending the closure of its stores beyond the initial
March 29 date. As the situation continues to evolve rapidly, L
Brands is not currently able to predict the timing of store
reopenings. However, it is monitoring the situation closely and
will provide updates as appropriate. The company continues to serve
customers through its direct channels, www.BathandBodyWorks.com
and, after a brief suspension, www.VictoriasSecret.com.
Actions Taken to Strengthen Financial
FlexibilityAs previously disclosed, in an abundance of caution and
as a proactive measure, on March 16, 2020, the company elected to
draw down $950 million from its Revolving Credit Facility. In an
effort to further strengthen its financial flexibility and
efficiently manage through the pandemic, the company is proactively
taking the following additional actions:
- Suspending its quarterly cash dividend beginning in the second
quarter of fiscal 2020. The company remains committed to paying
dividends over the long-term and will re-evaluate when
appropriate.
- Executing a substantial reduction in expenses and capital
expenditures. This includes an ongoing reduction in forward
inventory receipts.
- Temporarily reducing base compensation by 20% for senior vice
presidents and above. The cash compensation of Chairman and
CEO Leslie H. Wexner and other members of the Board of Directors
has been suspended. Additionally, the company is deferring annual
merit increases.
- Furloughing most store associates plus those who are not
currently working to support the online businesses or who cannot
work from home, effective April 5, 2020 until further notice. All
furloughed associates will continue to receive existing healthcare
benefits. As circumstances change, L Brands will make every effort
to bring these associates back to work as soon as possible.
Furloughed associates will also be able to apply for unemployment
benefits, if eligible.
The company currently has more than $2 billion
in cash. The company believes that this cash balance, along
with the actions taken as outlined above, provides the company with
sufficient current liquidity.
ABOUT L BRANDS:L Brands, through Victoria’s
Secret, PINK and Bath & Body Works, is an international
company. The company operates 2,920 company-owned specialty
stores in the United States, Canada, the United Kingdom and Greater
China, and its brands are also sold in more than 700 franchised
locations worldwide. The company’s products are also
available online at www.VictoriasSecret.com and
www.BathandBodyWorks.com.
Safe Harbor Statement Under the Private Securities
Litigation Reform Act of 1995We caution that any
forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995) contained in this press
release or made by our company or our management involve risks and
uncertainties and are subject to change based on various factors,
many of which are beyond our control. Accordingly, our future
performance and financial results may differ materially from those
expressed or implied in any such forward-looking statements. Words
such as “estimate,” “project,” “plan,” “believe,” “expect,”
“anticipate,” “intend,” “planned,” “potential” and any similar
expressions may identify forward-looking statements. Risks
associated with the following factors, among others, in some cases
have affected and in the future could affect our financial
performance and actual results and could cause actual results to
differ materially from those expressed or implied in any
forward-looking statements included in this press release or
otherwise made by our company or our management:
- general economic conditions, consumer confidence, consumer
spending patterns and market disruptions including severe weather
conditions, natural disasters, significant health hazards or
pandemics, terrorist activities, financial crises, political crises
or other major events, or the prospect of these events;
- the seasonality of our business;
- the risk that the transactions contemplated (the “VS
Transaction”) by the transaction agreement dated as of February 20,
2020 between us and SP VS Buyer LP (the “Transaction Agreement”)
are not consummated, including the risk that required regulatory
approvals for the VS Transaction may not be obtained;
- difficulties arising from business uncertainties and
contractual restrictions while the VS Transaction is pending;
- difficulties arising from turnover in company leadership or
other key positions;
- our ability to attract, develop and retain qualified associates
and manage labor-related costs;
- liabilities arising from divested businesses;
- the dependence on mall traffic and the availability of suitable
store locations on appropriate terms;
- our ability to grow through new store openings and existing
store remodels and expansions;
- our ability to successfully expand internationally and related
risks;
- our independent franchise, license and wholesale partners;
- our direct channel businesses;
- our ability to protect our reputation and our brand
images;
- our ability to attract customers with marketing, advertising
and promotional programs;
- our ability to protect our trade names, trademarks and
patents;
- the highly competitive nature of the retail industry and the
segments in which we operate;
- consumer acceptance of our products and our ability to manage
the life cycle of our brands, keep up with fashion trends, develop
new merchandise and launch new product lines successfully;
- our ability to source, distribute and sell goods and materials
on a global basis, including risks related to:- political
instability, environmental hazards or natural disasters;-
significant health hazards or pandemics, which could result in
closed factories, reduced workforces, scarcity of raw materials,
and scrutiny or embargoing of goods produced in infected
areas;- duties, taxes and other charges;- legal and
regulatory matters;- volatility in currency exchange
rates;- local business practices and political issues;-
potential delays or disruptions in shipping and transportation and
related pricing impacts;- disruption due to labor
disputes; and- changing expectations regarding product safety
due to new legislation;
- our geographic concentration of vendor and distribution
facilities in central Ohio;
- fluctuations in foreign currency exchange rates;
- stock price volatility;
- our ability to pay dividends and related effects;
- our ability to maintain our credit rating;
- our ability to service or refinance our debt;
- shareholder activism matters;
- the ability of our vendors to deliver products in a timely
manner, meet quality standards and comply with applicable laws and
regulations;
- fluctuations in product input costs;
- our ability to adequately protect our assets from loss and
theft;
- fluctuations in energy costs;
- increases in the costs of mailing, paper and printing;
- claims arising from our self-insurance;
- our ability to implement and maintain information technology
systems and to protect associated data;
- our ability to maintain the security of customer, associate,
third-party or company information;
- our ability to comply with laws and regulations or other
obligations related to data privacy and security;
- our ability to comply with regulatory requirements;
- legal and compliance matters; and
- tax, trade and other regulatory matters.
We are not under any obligation and do not intend to make
publicly available any update or other revisions to any of the
forward-looking statements contained in this press release to
reflect circumstances existing after the date of this press release
or to reflect the occurrence of future events even if experience or
future events make it clear that any expected results expressed or
implied by those forward-looking statements will not be
realized.
For further information, please contact:
L Brands: |
|
Investor Relations |
Media Relations |
Amie Preston |
Tammy Roberts Myers |
(614) 415-6704 |
(614) 415-7072 |
apreston@lb.com |
communications@lb.com |
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