L Brands Announces Amendment to Credit Facility and

COLUMBUS, Ohio, April 30, 2020 (GLOBE NEWSWIRE) – L Brands, Inc. (NYSE: LB) announced today that the company has amended its revolving credit facility and continues to take proactive steps to appropriately manage costs and expenses and ensure liquidity in light of the current coronavirus pandemic (COVID-19).

Modification of the revolving credit facility
On April 30, 2020, L Brands finalized an amendment converting its revolving cash flow revolver credit facility (“Cash-Flow Revolver”) into an asset-backed revolving credit facility (“ABL”). Total ABL commitments remain at $ 1 billion. The facility expires in August 2024. Following the modification and creation of the ABL, the company prepaid the $ 950 million that had previously been drawn under the Cash-Flow Revolver. The new ABL facility does not contain a financial maintenance clause restricting the leverage ratio.

Update on activity and liquidity
L Brands is taking prudent steps to maintain strong cash flow and financial flexibility.

The company continues to serve its customers and takes important steps to maximize its business through its online channels, www.BathandBodyWorks.com and www.VictoriasSecret.com.

As part of the company’s continued efforts to reduce spending and capital spending, L Brands has reduced its capital spending for 2020 from an initial forecast of around $ 550 million to around $ 250 million. The speed and agility of the company’s supply chain allowed the company to take rapid action to manage inventory receipts eventually. Spring inventory receipts (Q1 and Q2 2020) have been reduced by approximately 45% at Victoria’s Secret and 20% at Bath & Body Works compared to last year.

In addition, L Brands is extending payment terms to sellers and suspending rent payments to landlords during store closings.

After repaying the $ 950 million of its Cash-Flow Revolver that was withdrawn in March, the company has more than $ 900 million in cash as of April 30, 2020.

COVID-19 response
Since the onset of the global COVID-19 crisis, the company has taken proactive steps to strengthen its financial flexibility and manage the COVID-19 pandemic. As previously announced, these are:

  • Suspend its quarterly cash dividend beginning in the second quarter of fiscal 2020. The company remains committed to paying long-term dividends and will reassess if necessary.
  • Temporarily reduce base pay by 20% for senior vice presidents and above. The cash compensation of Chairman and CEO Leslie H. Wexner and other members of the Board of Directors has been suspended. In addition, the company defers annual increases on merit.
  • Put on leave of most store associates as well as associates who are not currently working to support online businesses or who cannot work from home. All associates on leave continue to receive existing health care benefits.

L Brands, through Victoria’s Secret, PINK and Bath & Body Works, is an international company. The Company operates 2,920 Company-owned specialty stores in the United States, Canada, United Kingdom and Greater China, and its brands are also sold in more than 700 franchise stores around the world. The company’s products are also available online at www.VictoriasSecret.com and www.BathandBodyWorks.com.

Safe Harbor Declaration under the Private Securities Litigation Reform Act 1995
We caution that any forward-looking statement (as that term is defined in the Private Securities Litigation Reform Act of 1995) contained in this press release or made by our company or our management involves risks and uncertainties and is subject to change depending on various factors. , many of which are beyond our control. Therefore, our future performance and financial results may differ materially from those expressed or implied in these forward-looking statements. Words such as “estimate”, “project”, “plan”, “believe”, “expect”, “anticipate”, “intend”, “planned”, “, expressions of expressions of expressions The risks associated with the following factors, among others, have in certain cases affected and in the future could affect our financial performance and our actual results and could cause the actual results to differ materially from those expressed or implied in forward-looking statements included in this press release or otherwise made by our company or our management:

  • general economic conditions, consumer confidence, consumer spending habits and market disruptions, including extreme weather conditions, natural disasters, significant health risks or pandemics, terrorist activities, financial crises, political crises or other major events, or the prospect of such events;
  • the seasonality of our business;
  • the risk that the transactions contemplated (the “VS Transaction”) by the transaction agreement dated February 20, 2020 between us and SP VS Buyer LP (the “Transaction Agreement”) will not be completed;
  • difficulties resulting from business uncertainties and contractual restrictions while the VS Transaction is in progress;
  • difficulties resulting from turnover in company management or other key positions;
  • our ability to attract, develop and retain qualified associates and to manage labor costs;
  • liabilities arising from divested activities;
  • the dependence on traffic in shopping centers and the availability of suitable store locations on suitable terms;
  • our ability to grow through the opening of new stores and the renovation and expansion of existing stores;
  • our ability to develop successfully internationally and the associated risks;
  • our independent franchise, licensing and wholesale partners;
  • our direct channel activities;
  • our ability to protect our reputation and brand images;
  • our ability to attract customers with marketing, advertising and promotional programs;
  • our ability to protect our trade names, trademarks and patents;
  • the highly competitive nature of the retail industry and the segments in which we operate;
  • consumer acceptance of our products and our ability to manage the lifecycle of our brands, keep up with fashion trends, develop new merchandise and successfully launch new product lines;
  • our ability to research, distribute and sell goods and materials globally, including risks related to:
    • political instability, environmental risks or natural disasters;
    • significant health risks or pandemics, which could lead to plant closures, reduced manpower, shortage of raw materials and scrutiny or embargo on goods produced in infected areas ;
    • duties, taxes and other charges;
    • legal and regulatory issues;
    • volatility of exchange rates;
    • local business practices and political issues;
    • delays or potential disruptions in shipping and transportation and associated price impacts;
    • disruptions due to labor disputes; and
    • changing expectations regarding product safety as a result of new legislation;
  • our geographic concentration of suppliers and distribution facilities in central Ohio;
  • fluctuations in foreign currency exchange rates;
  • volatility of stock prices;
  • our ability to pay dividends and related effects;
  • our ability to maintain our credit rating;
  • our ability to service or refinance our debt;
  • questions of shareholder activism;
  • the ability of our suppliers to deliver products on time, meet quality standards and comply with applicable laws and regulations;
  • fluctuations in product input costs;
  • our ability to adequately protect our assets against loss and theft;
  • fluctuations in energy costs;
  • increases in mailing, paper and printing costs;
  • claims arising from our self-insurance;
  • our ability to implement and maintain computer systems and to protect associated data;
  • our ability to maintain the security of customer, associate, third party, or corporate information;
  • our ability to comply with laws and regulations or other obligations related to data privacy and security;
  • our ability to comply with regulatory requirements;
  • legal and compliance issues; and
  • tax, commercial and other regulatory matters.

We have no obligation and do not intend to make publicly available any update or other revisions to any of the forward-looking statements contained in this press release to reflect circumstances existing after the release. date of this press release or to reflect the occurrence of future events even though experience or future events clearly indicate that the expected results expressed or implied by such forward-looking statements will not be achieved.

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