L Brands is losing its sheen mainly due to the dwindling performance of its brand Victoria’s Secret. Victoria’s Secret sales dropped five per cent in the fourth quarter of fiscal 2018. Meanwhile, comparable sales fell three per cent while comparable store sales (comps) tumbled seven per cent. L Brands is focusing on restructuring Victoria’s Secret, which was once known as the success formula for mass-market lingerie in the United States. The company plans to shut down 53 Victoria’s Secret stores in fiscal 2019, which failed to generate the desired results. Also, the company has relaunched the brand’s swimwear category. With this move, the company aims at boosting seasonal sales and store traffic.

Additionally, L Brands has sold its luxury lingerie brand La Senza. Further, in order to focus on its core product categories, L Brands plans to close operations at the luxury fashion accessories store Henri Bendel. L Brands’ gross margin has been contracting year over year for the past few quarters. For fiscal 2019, its gross margin rate is likely to decrease year over year, mainly due to lower merchandise margins. Also, SG&A costs are expected to increase year over year, stemming from higher wage rate and inflation-related pressure. Further, L Brands’ balance sheet doesn't look healthy, owing to a high debt level.