- Huw Hughes |
Victoria’s Secret owner L Brands has announced it will be cutting around 15 percent of its head office workforce in a bid to cut costs amid the Covid-19 pandemic.
The move is part of a wider strategy by L Brands which aims to deliver approximately 400 million dollars in annual cost reductions. Approximately 175 million dollars of savings are expected to be achieved in fiscal 2020. Other measures include store closures, enhanced inventory management and negotiating lower rents with landlords.
The company said for Q2 it expects to record pre-tax severance costs of approximately 75 million dollars related to the headcount reductions.
L Brands announces cost-cutting measures
It follows a review by the company of its home office organisations “to achieve meaningful reductions in overhead expenses”.
It comes as the industry grapples with the financial impact caused by store closures during lockdown. Other fashion companies to announce similar job cuts to their workforce in recent weeks include Burberry, Arcadia, Harrods, and Ted Baker.
“The board and management remain committed to separating the Bath & Body Works and Victoria’s Secret businesses, as well as improving the profitability of the Victoria’s Secret business,” L Brands CEO Andrew Meslow said in a statement. “During the second quarter, we made meaningful progress toward these goals.
“Decisions relating to our workforce are incredibly difficult and not taken lightly, but these actions are necessary to best position our company for the long-term. On behalf of the board and management team, I’d like to extend our deepest appreciation to the impacted associates for their contributions and dedication over the years.”
Photo credit: L Brands