Bath & Body Works Is Closing About 50 Stores This Year
It's not all bad news, as the retailer laid out plans for a new retail strategy.
Bath & Body Works stores are a shopping mall staple. Chances are, if you think about your local mall, you'll remember where the retailer's red-and-white checkered awnings were—or perhaps you're more familiar with the brand's updated blue-and-white color scheme. These days, Bath & Body Works' single-wick and three-wick candles are the main attraction. However, if you pick up your seasonal scented candles from a nearby shopping mall, you'll want to pay attention, as the retailer just confirmed it's closing roughly 50 of its stores in 2023. Read on to find out why Bath & Body Works is closing locations, and what's next for the beloved company.
Your local mall could soon lose its Bath & Body Works.
Like many other businesses, Bath & Body Works is moving away from its shopping mall roots. According to commentary published ahead of its fourth-quarter earnings call on Feb. 23, the company is closing roughly 50 mall stores this year.
No additional information was provided about which stores are closing, nor when closures will commence. As of Feb. 2023, Bath & Body Works had approximately 1,802 stores, per a presentation given during the earnings call.
In reference to the closures, the company prefaced by saying that it's "investing in our technology, distribution, and logistics capabilities to support our long-term growth."
Best Life reached out to Bath & Body Works for more information, but has yet to hear back.
There's a silver lining.
If you're a loyal Bath & Body Works shopper, you may be worried that you'll no longer have a store to browse in person. After all, it's much easier to pick and choose your favorite scents when you can sample them on the spot.
But rest assured that the mall closures are part of a larger real estate initiative. In total, the company has 115 projects planned, which include remodeling 25 White Barn Candle Company stores (a Bath & Body Works sister brand) and opening about 90 "new off-mall stores."
When factoring in the closures, the company is actually growing its total square footage by 4 percent.
Sales fell last quarter, the company said.
In a press release outlining fourth quarter results, Bath & Body Works confirmed that its net sales decreased by 4.6 percent, when compared with the same quarter in 2021. According to The Wall Street Journal, the company expects numbers to continue to trend downward for the first half of this year.
During the earnings call on Thursday, Wendy Arlin, chief financial officer for Bath & Body Works, attributed this to inflation, lower demand, and rising wages (which also contributes to inflation, as companies need to charge more for their products to pay their employees), per The Wall Street Journal.
The outlet also reported that Bath & Body Works is feeling "pressure" from one of its investors, Third Point, due to its financial performance. According to a letter sent to the Bath & Body Works Board of Directors, Third Point maintains a 6 percent stake in the company. The hedge fund also announced plans to nominate candidates to the board, a move which Bath & Body Works said it "strongly disagrees" with.
Bath & Body Works is looking to cut costs.
Per the company's press release, Bath & Body Works hired a team of "external advisors to assist in a top to bottom review of the business," also helping the retailer identify ways to cut costs by $200 million in 2023 and 2024.
"While we're focused in the near term on optimizing the core business, we'll continue to explore longer term opportunities, such as adding new adjacent categories," CEO Gina Boswell said during the call, including products for men, Retail Dive reported.
In the press release, Boswell further noted that Bath & Body Works is also looking to strengthen its overall position as a home and personal care retailer.
"We are focused on expanding our customer base, bringing exciting new products to market, and unlocking the potential of our omnichannel model, while aggressively pursuing opportunities for growth and margin expansion," Boswell said. "I am very optimistic about our future and our ability to profitably grow our business and deliver long-term shareholder value."