Please ensure Javascript is enabled for purposes of website accessibility

L Brands Extends Its Store Closures, Suspends Dividend

By Rich Smith - Mar 27, 2020 at 5:41PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Employees of its Bath & Body Works, Victoria's Secret and PINK chains will be furloughed next month, but will keep their health benefits.

Ten days ago, L Brands (BBWI 3.57%) announced that in response to the growing threat of the coronavirus pandemic, it would "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."

Now, it's clear the situation has gotten even more serious.

Sorry we are closed sign hung on restaurant door

Image source: Getty Images.

Citing "the continued spread of COVID-19 and stay-at-home orders by government officials across the country," and recognizing that management can't predict when the situation will start to improve, on Friday, L Brands announced that it was extending the closure of its stores indefinitely.

In the meantime, L Brands is tapping its $950 million revolving credit facility for the funds to stay solvent. To further conserve cash, it is suspending its dividend as of the second quarter of its fiscal 2020, and will also make a "substantial reduction" in capital spending and other expenditures.

In particular, company executives at the senior vice president level and above will take 20% reductions in their base compensation, cash bonuses will be deferred, and CEO Leslie H. Wexner and other members of the board will take no cash salary at all.

Employees who aren't working to support the online businesses or who can't do their jobs from home will be furloughed effective April 5 and until further notice. Although they won't receive paychecks, they will keep their healthcare benefits.

L Brands stock closed trading Friday down 4.3%.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Bath & Body Works, Inc. Stock Quote
Bath & Body Works, Inc.
$27.88 (3.57%) $0.96

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.