L Brands announced it will close all 23 Henri Bendel stores, including its famous Fifth Avenue location in Manhattan, as well as its website, after the holidays. The company plans to focus on its other retailers, including Victoria’s Secret and Bath & Body Works.
“We have decided to stop operating Bendel to improve company profitability and focus on our larger brands that have greater growth potential,” said Leslie Wexner, chairman and chief executive of L Brands, according to The Wall Street Journal.
Louisiana-born Henri Bendel opened his first shop in 1895 in Greenwich Village, selling apparel, fragrances, cosmetics and handbags. Once it was taken over by L Brands in 1985, the retailer began focusing solely on handbags and accessories.
Wexner has parted ways with businesses before, selling off apparel chains including Abercrombie, Lane Bryant and Express. In 2016, he eliminated swimwear at Victoria’s Secret so the brand could focus on sportswear.
L Brands reported $12.6 billion in revenue last year. It estimates that Henri Bendel’s full-year revenue and operating loss, excluding closing costs, will be approximately $85 million and $45 million, respectively.
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In addition, the company slashed its earnings estimates by 8 percent earlier this year. For fiscal 2018, L Brands now expects earnings per share to fall within a range of $2.70 and $3, down from a prior estimate of $2.95 to $3.25.
For that, L Brands blamed declining sales at Victoria’s Secret, which was described in reports as “broken,” “out of date” and “desperate-looking” by various segment watchers and analysts, who are wondering loudly if Victoria’s Secret (and the rest of L Brands) are on a collision course with the retail death spiral that has already taken out so many mall brands before it.
“The MATH doesn’t add up,” Jefferies analyst Randal Konik wrote in a note to clients.
L Brands said Bendel employees will be given retention bonuses if they stay on until January, and can interview for openings at the company’s other units.
