The Company Did Not Rebound, And Investors Suggested That It Should Be Kicked Out.

In 2018, it was a chaotic and tense year for the L Brands and the parent company, because there were many major strategic adjustments.

L Brands shut down the high-end ladies' brand Henri Bendel and sold underwear brand La Senza.

It has a new CEO John Mehas, and has closed some shops and remodeled Pink series.

It seems that it has entered a latent adjustment period, but some investors can not wait. It is thought that these strategies alone can not bring the group's performance back to the right track. Therefore, it is suggested that L Brands simply divestiture.

According to "women's Wear Daily" news, radical investment company Barington Capital recently pointed out that L Brands's underwear business and body care business has a big gap.

It is believed that L Brands should split the Bath & Body Works with the struggling hardships to bring better returns to investors.

This proposal is directly pmitted to Leslie Brands, chairman of L Brands, chairman of Barington Capital, James Mitarotonda.

In the message to Wexner, Mitarotonda thinks L Brands is the time to make changes.

"Unfortunately, the performance of L Brands has been disappointing in the past few years," Mitarotonda said. "In the past year, three years and five years, the company's share price performance has lagged far behind its competitors and the entire market, from a high of $100.22 per share in November 4, 2015 to a sharp decline of 26.81 US dollars at yesterday's closing, or more than 73%."

The 2018 performance may also be one of the reasons for Barington Capital's suggestion.

Just entering the March, the L Brands of the virgin parent company has handed in the pcript of the past year - a slight increase in sales, a decline in share prices and profits.

The result is almost everyone's expectation, because in the past few years, people have seen no signs of improvement in this declining underwear brand.

By contrast, sales of L Brands's body care brand Bath & Body Works increased by 12% in the fourth quarter.

In fact, L Brands's body care brand business surpassed weir last year and became the leader of the group's performance.

In the year-end performance report, L Brands also made it clear that it would continue to shut down the store and increase the store of Bath & Body Works.

The proposal to split the Barington Capital sounds familiar, because this strategy is inspired by the Gap group's announced resolution last week.

To some extent, the Gap group is facing a situation similar to that of L Brands.

Gap group's head brand Gap has been depressed for nearly 5 years. During this period, another brand Old Navy of the group jumped up, showing a good development posture and replacing Gap as the first carriages to pull the group's achievements.

Last week, Gap group announced that it will be split into two listed companies in 2020, in the face of Gap, which has not bounced back.

Old Navy will be stripped, and the remaining Gap, Banana Republic, Athleta, Intermix, Hill City and other brands will form another new company.

As a result of the news, Gap group's share price rose more than 20% to 31.75 US dollars in after hours trading, proving that it might be a feasible solution.

This method is a respectable retreat for Gap with a long history and the highest status in the group, and this method may also become one of the best ways to protect it.

On the one hand, when the poor Gap, Wei and other brands in the group stand together for comparison, they always expose their shortcomings. The aura of "head brand" has instead become the pressure to be pressed.

On the other hand, the two brands have a long history, and it is difficult to change the brand's main idea and external image in the short term. Therefore, apart from the other brands in the group, it is also convenient for the brand to adjust itself slowly.

Author: Jia Lin Wei