L brands provides additional update related to COVID-19 pandemic

L Brands, Inc. (NYSE: LB) provided additional updates on actions it is taking, following its initial March 17, 2020 announcement related to the novel coronavirus pandemic (COVID-19).

Store and Direct Operations

On March 17, 2020, L Brands announced the temporary closure of all Bath & Body Works, Victoria’s Secret and PINK stores in the United States and Canada through March 29, 2020. Associates will continue to receive pay and benefits through April 4, which is one week longer than originally announced.

Based on the continued spread of COVID-19 and stay-at-home orders by government officials across the country, the company is extending the closure of its stores beyond the initial March 29 date. As the situation continues to evolve rapidly, L Brands is not currently able to predict the timing of store reopenings. However, it is monitoring the situation closely and will provide updates as appropriate. The company continues to serve customers through its direct channels, www.BathandBodyWorks.com and, after a brief suspension, www.VictoriasSecret.com.

Actions Taken to Strengthen Financial Flexibility

As previously disclosed, in an abundance of caution and as a proactive measure, on March 16, 2020, the company elected to draw down $950 million from its Revolving Credit Facility. In an effort to further strengthen its financial flexibility and efficiently manage through the pandemic, the company is proactively taking the following additional actions:

• Suspending its quarterly cash dividend beginning in the second quarter of fiscal 2020. The company remains committed to paying dividends over the long-term and will re-evaluate when appropriate.
• Executing a substantial reduction in expenses and capital expenditures. This includes an ongoing reduction in forward inventory receipts.
• Temporarily reducing base compensation by 20% for senior vice presidents and above. The cash compensation of Chairman and CEO Leslie H. Wexner and other members of the Board of Directors has been suspended. Additionally, the company is deferring annual merit increases.
• Furloughing most store associates plus those who are not currently working to support the online businesses or who cannot work from home, effective April 5, 2020 until further notice. All furloughed associates will continue to receive existing healthcare benefits. As circumstances change, L Brands will make every effort to bring these associates back to work as soon as possible. Furloughed associates will also be able to apply for unemployment benefits, if eligible.

The company currently has more than $2 billion in cash. The company believes that this cash balance, along with the actions taken as outlined above, provides the company with sufficient current liquidity.

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