Last month, retailer L Brands (NYSE:LB) reduced its exposure to the lingerie market by selling a 55% stake in Victoria's Secret to private equity firm Sycamore Partners. L Brands still held onto a 45% interest in VS, though -- and now that's looking like that might have been a mistake.
In an 8-K filing with the Securities and Exchange Commission Tuesday, L Brands announced it will "temporarily close all Bath & Body Works, Victoria's Secret and PINK stores in the United States and Canada, effective March 17 through March 29, 2020," in order to promote social distancing.
Just two days later, the company already needs to update that policy. Today, the company says it has "made the decision to suspend all new e-commerce orders for Victoria's Secret and PINK through March 29, 2020."
"The Bath & Body Works e-commerce business will continue to operate with prioritization on soaps and hand sanitizers," continued LB. But the coronavirus has effectively shut down e-commerce sales by Victoria's Secret (and PINK, too).
It gets worse. Even LB's Bath & Body Works e-commerce business, according to the company, is fulfilled by a third party, and that company's "ability to continue to perform these services may be affected by developing circumstances." In theory at least, the e-commerce shutdown could eventually extend to Bath & Body Works as well.
But for workers it also gets better. All LB employees "will continue to receive pay and benefits during the temporary closure period." To cover expenses during this time of decreased sales, LB says it is drawing upon $950 million of a $1 billion Secured Revolving Credit Facility. This will give the company a total of about $2 billion in cash on hand with which to weather the storm.