“Slow and inefficient.”
That’s how Bath & Body Works’ CEO, Daniel Heaf, described his company on the company’s Q3 earnings call on Thursday morning.
“Our organization has become slow and inefficient,” Heaf said. “Unnecessary complexity has reduced our speed and dampened our innovation.”
Bath & Body Works reported weaker-than-expected Q3 results. The chain reported a drop in sales and earnings and cut its full-year guidance.
Heaf said that while the consumer environment is tough right now, the brand has made mistakes that are driving these weaker numbers.
He said the brand has “not attracted a younger consumer” and has become dependent on heavy discounting, which has eroded brand value and image.
Heaf, who joined Bath & Body Works in May and was previously at Nike, also presented the company’s comeback plan on Thursday.
He said that the company plans to” reignite its brand” and attract a new and younger consumer by pouring investment into its core areas — body care, home fragrances, soaps, and sanitizers. It will be axing hair care and men’s grooming products from its assortment to simplify its offering.
“We will transform Bath & Body Works to be a faster and more efficient organization. Work has already begun, and we will continue to break down silos, speed up decision making and strengthen the agile operating model that makes this company great,” Heaf said in the earnings release.
The chain is also launching on Amazon to reach new customers and target the younger audience. Heaf said that the company estimates that “$60 million to $80 million of Bed & Body Works’ products are sold via the grey market on Amazon, so launching there “is an incredible sales opportunity.”
Bath & Body Works’ stock price is down 25% today and 58% this year.
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