Shares of L Brands (NYSE:LB) were sharply lower in midday trading on Tuesday, after the company said that it will temporarily close stores and draw down a line of credit in response to the coronavirus outbreak.
As of 1 p.m. EDT, L Brands' shares were down about 17% from Monday's closing price.
L Brands is the parent company of the Victoria's Secret, Pink, and Bath and Body Works retail chains. The company said on Tuesday that all of its stores in the United States and Canada will close immediately, and will stay closed though at least March 29.
The company also said that it has drawn down $950 million from its $1 billion revolving line of credit, in a proactive measure to ensure that it has the cash to weather the effects of the novel coronavirus pandemic. Including the drawdown amount, the company currently has over $2 billion in cash on hand, it said.
Retailers have scrambled to minimize losses amid a steep decline in store traffic since the beginning of March. Consumers are heeding health authorities' advice to practice social distancing to slow the spread of COVID-19, staying home except for essential errands whenever possible.
Not surprisingly under the circumstances, L Brands has also withdrawn the guidance for 2020 that it provided to investors during its earnings call on Feb. 27. The company did not give a revised outlook on Tuesday.