Henri Bendel, the once iconic department store known for its brown-and-white striped bags and introducing Coco Chanel designs to the U.S., is facing extinction in a changing retail environment.
In an effort to increase shareholder value, L Brands Inc. (LB, Financial) announced on Thursday it will be closing down all of its Henri Bendel stores as well as its website after the holiday season.
The Columbus, Ohio-based company, which also owns brands like Bath & Body Works and Victoria’s Secret, said the retailer of women’s handbags, jewelry and fashion accessories is expected to bring in $85 million in revenue for 2018. In August, L Brands cut its full-year forecast, citing declining sales at Victoria’s Secret and PINK amid competition from American Eagle Outfitters' (AEO, Financial) Aerie brand and others.
In a statement, L Brands Chairman and CEO Leslie Wexner said the goal of the initiative is to improve profitability as well as focus on the brands that have greater growth potential.
“This decision is right for the future growth of our company, but not easy because of the impact to our L Brands family,” he said. “I want to thank our Bendel associates for their dedication to this iconic brand and to our loyal Bendel customers.”
While it did not disclose any details regarding costs of shutting down the business, the company said Henri Bendel employees that are staying through January will be offered retention bonuses. After the stores close, they will be invited to interview for other open positions within the company or be given severance pay and support while they search for new employment.
With a market cap of $7.88 billion, shares of L Brands were trading 5.03% higher at $28.83 on Friday morning. GuruFocus estimates the stock has tumbled 53% year to date.
L Brands acquired the 123-year-old luxury brand in 1985. Henri Bendel stores and the website will remain in operation through January.
Disclosure: No positions.
