L Brands, Inc. yesterday announced a number of actions in response to the continued spread of novel coronavirus (COVID-19). With the wellbeing of its customers, associates and communities as its top priority, and to help limit the spread of the coronavirus, L Brands will temporarily close all Victoria’s Secret, Bath & Body Works and PINK stores in the United States and Canada, effective March 17 through March 29, 2020.
Additionally, home office associates have been asked to work from home if possible. All employees will continue to receive pay and benefits during the temporary closure period, and the company will continue to serve customers through its direct channels. These decisions will be re-evaluated as new information becomes available regarding the COVID-19 pandemic.
Drawdown of Secured Revolving Credit Facility
As previously disclosed, the company has access to a Secured Revolving Credit Facility, which has an aggregate size of $1 billion and expires in May 2024. 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. After the drawdown, the company has more than $2 billion in cash.
First Quarter 2020 Earnings Guidance Update
Due to the heightened uncertainty relating to the potential impacts of COVID-19 on the company’s business operations, including its duration and its impact on overall demand for merchandise, the company is withdrawing the first quarter 2020 earnings guidance issued on Feb. 26, 2020. The company is not providing an updated outlook at this time.
