On July 31, 2020, it was reported, L Brands has announced it will cut 850 home office jobs or about 15% of that workforce, an effort to garner some $400 million in annualized cost savings, with $175 million achieved in fiscal 2020, according to a company press release. BMO Capital Markets analysts estimate the layoffs will drive about half that. In focus is Victoria's Secret, where changes in "management structure and the labor model" will reduce store selling costs, the company said. Along with 250 previously announced Victoria's Secret store closures in North America, where negotiations with landlords for rent relief are ongoing, the company said it's also "working to reduce operating losses in the company-owned businesses in the U.K. and China." The company said it's working with suppliers to manage inventory and reduce merchandise costs to boost margins at Victoria's Secret, a process that has already driven down spring inventory receipts by about 45%, with fall receipts expected to be down about 50% year over year.
On July 29, 2020, it was reported, could JCPenney's savior be a private equity firm? According to a report in the New York Post, Sycamore Partners has offered $1.75 billion to acquire JCPenney out of bankruptcy. The anonymous source told the Post that Sycamore plans to merge Penney with regional department store Belk, which the firm acquired in 2015. "JCP is the lifeboat for Belk, which wants to compete with Macy's nationally," the source told the Post. Other bidders for JCPenney include Hudson's Bay Company, which is offering $1.7 billion, and mall operators Brookfield Property and Simon Property, which have partnered with a $1.650 billion bid, according to the Post.
On July 15, 2020, PVH Corp. said it will permanently shutter its 162 Heritage Brands outlet stores by mid-2021. The brands with company-run stores are Izod, Van Heusen and Warner's, according to the company's 2019 fiscal year summary. The company's Tommy Hilfiger and Calvin Klein retail stores aren't affected, a company spokesperson told Retail Dive in an email. The company will also cut 450 positions or 12% of its workforce, according to a press release. The company expects the workforce cuts to save $80 million annually. PVH expects the changes to cost about $80 million in pre-tax charges over the next 12 months mostly severance, lease termination costs, inventory markdowns and noncash asset impairments about $10 million of that is expected to be noncash.
On July 14, 2020, it was reported, Bed Bath & Beyond has put a price tag on how much it expects in annual savings by getting better prices from current vendors. In an update filed with the SEC today, the retailer said it should be able to generate approximately $200 million in savings each year by renegotiating better terms. As previously announced, the company has also embarked on an initiative to remove about $1 billion in inventory from within Bed Bath & Beyond store locations over the next 24 months. That sum includes inventory associated with the 200 units its plans to shutter over the same period. Although the filing did not specifically address recent reports that BBB is shopping the Cost Plus World Market and Christmas Tree Shops/AndThat chains, the company said the sale of non-core assets could bring in $350 million to $450 million.
