Will Bath & Body Works Win by Returning to the Core?

Bath & Body Works (BBW) announced a major reset after finding moves to enter ancillary categories — including hair care, men’s grooming, lip care and laundry — led to sales declines in core categories, and failed to attract new and younger consumers.

The move comes as the retailer reported lower sales and earnings in the third quarter, while also slashing its guidance for the year.

The advance into new sectors came as consumer demand for cleansers, personal care products, and candles softened in the days following the early part of the pandemic.

However, Daniel Heaf, a former Nike and Burberry executive who became CEO in May, said on an analyst call last week that all four core categories saw sales declines in the latest quarter as the focus on adjacent categories “resulted in underinvestment in our core and not keeping pace with our consumer.” He further said the retailer had become overly reliant on promotions and collaborations — such as a recent one with NYC bakery Milk Bar, as well as others with Netflix and Disney franchises.

Bath & Body Works Outlines its Turnaround Plan

The transformation plan includes:

• Refocus on core categories: BBW will reinvest in its body care, home fragrance, soaps, and sanitizers with a goal of creating “disruptive and innovative products that serve the needs of today’s consumer.” The changes, not expected to be noticeable until the second half of 2026, will be driven by consumer insights. Heaf said, “Two consumer muses designed with deep consumer insights guide our every decision: Jen, who demands bold fragrance, fun, seasonality and value; and Zoe, who craves clean products with elevated scent and design at an accessible price point. These two muses keep us true to today’s consumer while providing opportunities to engage new and younger consumers.”
• De-clutter stores: BBW will exit hair care and men’s grooming while streamlining overall SKUs. Heaf said, “To sharpen our focus and make our in-store experience less overwhelming, we will cut our assortment and reduce complexity, concentrating on fewer, more on-trend product priorities.”
• Bigger statements: BBW will market “fewer, bolder, more targeted product moments,” including focusing on two iconic scents to drive stronger influencer advocacy and a more aspirational positioning.
• Elevated e-commerce offerings: In order to reach new and younger consumers “wherever they shop,” investments will be made to enhance BBW’s app and websites to increase engagement, simplify product discovery, amplify brand and product stories, and reduce purchase friction. Heaf said BBW is significantly underpenetrated online versus competitors — noting, for example, that in soaps and sanitizers, 40% to 45% of the category is sold online while BBW’s current e-commerce penetration in those items is 20%. He said, “That just represents the incredible opportunity that we have to drive growth and acquire new customers in the digital channel.”
• Expanding distribution: Also to extend the brand’s reach, BBW will expand into select wholesale channels with Amazon — this capability is expected to go live in the first half of 2026. Heaf said, “Amazon will enable us to reach new consumers and reengage lap ones, and we will launch with a curated assortment of evergreen, hero products and over time, introduce products designed to acquire a new consumer.”
• Invest in speed and efficiencies: Investments will be made around speeding inventory delivery, shortening cycle times, and implementing a cost savings program expected to deliver $215 million in cost savings that will be reinvested into revenue-generating activities.

“Our strategy is guided by what we have seen working in the marketplace,” Heaf told analysts.

“Over the years, consumers have evolved. They seek greater efficacy, ingredient-led products, modern packaging, emotive storytelling and elevated multichannel experiences. Our competitors have risen to meet those needs. We have not. In some cases, as with our formulations, we have invested in these attributes, but we have not communicated them consistently and effectively,” he added.