Bath & Body Works CFO to Leave as Retailer Battles Softer Demand
Bath & Body Works Inc. is searching for a new finance chief as the fragrance and body-care products retailer recovers from a recent potential proxy fight and battles changes in consumers’ buying habits.
The Columbus, Ohio-based company on Thursday said Wendy Arlin plans to step down as chief financial officer. Ms. Arlin plans to leave the company on July 29, or earlier if a successor is named. Bath & Body Works said it has launched a search for Ms. Arlin’s successor with the assistance of an executive-search firm.
Ms. Arlin was appointed CFO in August 2021 when Bath & Body Works was split from Victoria’s Secret. L Brands, which owned both brands, changed its name to Bath & Body Works and spun off Victoria’s Secret into a separate publicly traded company. Ms. Arlin, a former audit partner at accounting firm KPMG LLP, joined L Brands in 2005 as senior vice president of finance and controller.
Her exit is part of a planned reorganization of senior management, including a pair of new management positions aimed at accelerating growth, Bath & Body Works said Thursday. Thilina Gunasinghe, most recently global vice president, chief technology architect and data officer at fast-food giant McDonald’s Corp. , has been appointed chief digital and technology officer, effective April 17, while the newly created chief customer officer role has yet to be filled, the company said. Ms. Arlin’s departure will be treated as a termination without cause, making her eligible for severance benefits.
“Wendy was an instrumental member of the team that led the successful spinoff of the Victoria’s Secret business and established Bath & Body Works as a stand-alone public company, in addition to her work building a strong finance team and helping the company navigate the dynamic operating environment,” Chief Executive Officer Gina Boswell said in a release. Bath & Body Works didn’t respond to a request for additional comment on the CFO change.
The news of Ms. Arlin’s planned departure comes on the heels of a potential proxy battle between Bath & Body Works and Dan Loeb’s Third Point LLC. Hedge fund Third Point planned to launch a proxy fight against the retailer, criticizing the company for what the activist investor said was excessive executive pay and lagging financial performance, The Wall Street Journal reported in February. Third Point, which first disclosed a more than 6% stake in Bath & Body Works in December, intended to nominate candidates to the company’s board.
Those plans were called off, however, after Bath & Body Works in March added Thomas J. Kuhn to the board. Mr. Kuhn, an attorney and managing member of the investment firm Doorbrook LLC, was endorsed as a director by Third Point, the retailer said.
Third Point didn’t respond to a request for comment on Ms. Arlin’s planned exit.
Bath & Body Works, like other retailers, benefited during the Covid-19 pandemic from increased consumer spending. Growth has since slowed, however, as retailers in general have faced a mix of high inflation, consumer expectations for price reductions and excess inventory. The company in February said it expects sales to fall by as much as a mid-single-digit rate this year, as sales trends in the fourth quarter persist through the first half of 2023. Bath & Body Works projects per-share earnings from continuing operations of between $2.50 and $3.00 for 2023, compared with $3.40 in 2022.
The company reported net sales of roughly $2.89 billion for the quarter ended Jan. 28, compared with around $3.03 billion a year earlier. Net income was $434 million for the quarter, down from $594 million in the prior-year period. Bath & Body Works said it was looking to cut $200 million in annual costs.
“In planning for the year, we believe that it is prudent to acknowledge the macroeconomic pressures continuing to impact our customers and their spending habits as well as the current trends of the business,” Ms. Arlin told analysts in February.
The company expects certain headwinds, such as wage pressures and inflation, will moderate in the second half of the year. “We are striving to exceed our forecast,” Ms. Arlin said.
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