This Is Why L Brands Is Shuttering All Its Henri Bendel Stores – Forbes

Henri Bendel’s famous brown and white stripped shopping bags and hat boxes will soon be history as Victoria’s Secret parent L Brands is set to shut all stores. (Photo by Craig Barritt/Getty Images for Henri Bendel)

The famous brown-and-white striped shopping bags of luxury retailer Henri Bendel will soon be history as parent company L Brands is set to shut all of Henri Bendel’s 23 storesincluding its Fifth Avenue flagship in New York Citycome January. But don’t blame the troubles just on its larger sister chain Victoria’s Secret.

In a statement late Thursday, L Brands chairman and CEO Les Wexner said he’s shutting down the Bendel stores and online operations because the company, which also owns Bath & Body Works, wants to improve profitability and focus on its “larger brands that have greater growth potential.”  

Yes, Victoria’s Secret, with nearly 1,200 stores and the company’s largest unit, has seen profit and sales declining as even demand for its once-hip and younger label Pink has faltered. But Henri Bendel itself has been losing money: L Brands estimates that Henri Bendel’s 2018 sales and operating loss, excluding closing costs, will total $85 million and $45 million, respectively.

While that business is small compared to the $12.6 billion in sales L Brands generated last year, the loss was outsized in comparison. L Brands’ “other” segment, which includes Henri Bendel and the company’s acquired Canadian lingerie chain La Senza, has posted year-to-date operating loss of $93 million, which isat minimumthe third year it’s not made money. That was about half of Victoria’s Secret’s operating profit of $197 millionafter a 42% slumpduring the same period.

Bath & Body Works, with about 1,700 stores, was the only bright spot, with operating income rising 13% to $292 million.

Henri Bendel’s losses and closings also reflected challenges facing the brick-and-mortar luxury space as it struggles to compete against an increased shift to online purchases on marketplaces like Farfetch, which recently filed its IPO plan. The sector also is competing against changing consumer preferences to pare back on fashion to spend more on things like the latest iPhone and other gadgets.

U.S. store-based luxury department stores have seen their sales sliding 23% between 2012 and 2017 to $5 billion last year, according to Euromonitor.

Henri Bendel says it is the first luxury retailer with an upper Fifth Avenue address. (Photographer: Craig Warga/Bloomberg)

Henri Bendel’s closings also will once again rewrite the retail map on New York’s glitzy Fifth Avenue. About 20 blocks down from Henri Bendel, the Lord & Taylor flagship also will close after the holiday season to make way for co-working space WeWork. The famous shopping stretch now counts such tenants as Apple, Microsoft and Dyson alongside traditional luxury fashion emporiums including Neiman Marcus’ Bergdorf Goodman and Tiffany & Co.

Henri Bendel can trace its roots to 1895, when its namesake founder opened a shop in New York’s Greenwich Village. Wexner bought the company in 1985 before eventually opening the current Fifth Avenue flagship in 1991.

With the help of Jacqueline Kennedy Onassis, the flagship store received landmark status from the Landmark Preservation Commission because of one-of-a-kind Lalique windows that graced the side of the store that were uncovered during renovation, Henri Bendel said on its website.

The department store’s list of noteworthy “accomplishments” also include Bendel being the first retailer to brand himself, the first luxury retailer with an upper Fifth Avenue address, the first to hold a semi-annual sale, the first to offer in-store makeovers, and the first to stage a fashion show, the retailer said on its website. It said Bendel was also responsible for bringing Coco Chanel to the United States and is credited with discovering Andy Warhol, who was brought on as an in-house illustrator.

In 2008, Henri Bendel began to open new stores outside of New York City. At the time, Wexner described the new Bendel stores as “probably one of the most promising things we have ever birthed.”

The 81-year-old Wexner is no stranger to shedding brands he sees as no longer fitting into the company’s strategic focus. Once an apparel empire owning brands from Abercrombie & Fitch to Express, Columbus, Ohio-based L Brands, under Wexner, over time spun off, sold or shut its various portfolio of brands. He had also exited Henri Bendel’s apparel business to focus on its beauty, jewelry, and other accessories business.

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