Restructuring Activities

6 Months Ended

Jul. 31, 2021

Restructuring and Related Activities [Abstract]

Restructuring Activities

Restructuring Activities

During the second quarter of 2020, management of L Brands and the Company reduced home office head count as a result of completing a comprehensive review of the home office organizations in order to achieve meaningful reductions in overhead expenses and to decentralize significant shared functions and services to support the creation of standalone companies. Pre-tax severance and related costs associated with these reductions, totaling $51 million, are included in General, Administrative and Store Operating Expenses in the 2020 Combined Statements of Loss.

During year-to-date 2021, the Company made payments of $10 million related to severance and related costs associated with these reductions. As of July 31, 2021, a liability of $4 million related to these reductions is included in Accrued Expenses and Other on the Combined Balance Sheet.

Victoria's Secret U.K.

Due to challenging business results in the U.K., the Company entered into Administration in June 2020 to restructure store lease agreements and reduce operating losses in the U.K. business. In October 2020, the Company entered into a joint venture with Next PLC for the Victoria’s Secret business in the United Kingdom and Ireland. Under this agreement, the Company owns 49% of the joint venture, and Next owns 51% and is responsible for operations. The Company accounts for its investment in the joint venture under the equity method of accounting.