Daniel Heaf, chief executive officer of Bath & Body Works, is wasting no time as he looks to turn around what he refers to as a sleeping giant.
“When I looked at the company from the outside in I thought, ‘Wow, what a sleeping giant of a company.’ It has almost incredibly done all these hard things and yet not put it together in a way that means it is growing in the way that it should do,” he said, during an interview at Bath & Body Works’s new office in Midtown Manhattan.
Indeed, the company, which like sister brand Victoria’s Secret was spun out of L Brands as a stand-alone entity in 2021, reported net sales of $1.59 billion for its third quarter ended Nov. 1, a decrease of 1 percent compared to the same period a year earlier. Wall Street had penciled in $1.63 billion on average. As a result, BBW downgraded its full-year 2025 net sales guidance from an increase ranging from 1.5 percent to 2.7 percent to a decline in the low-single digits.
These results come at a time when fragrance overall has been one of the strongest categories in beauty. Now Heaf, a newcomer to beauty who previously held senior positions at Nike and Burberry, is tasked with restoring the equity of an iconic American brand that has lost mindshare with younger generations amidst an onslaught of digitally minded indie brands.
“There’s no brand rejection,” said Heaf, who was most recently chief strategy and transformation officer of Nike. “It’s almost like consumers have just forgotten about us.
“When I talk to all these incredible influencers and celebrities, they’re like, ‘I remember Bath & Body Works. You guys were the very first place I ever went to. My mom took me to the mall. What happened to you guys?’” he said. “I say, ‘We’re still there. It’s just you probably stopped going to the mall quite some time ago.’”
While the brand has been tackling the demise of the mall for some time, diversifying its network of 2,400 stores, and 99 percent of the stores are profitable, the company is not growing.
“They’ve done the hard work of moving off mall. We’re more off mall now than in mall. We’ve kept all our A-plus, A, B, C malls, which are all the malls that are doing well, and we’ve been exiting out of the lower tier malls that are the ones that have been struggling,” Heaf said.
For Heaf, part of the issue is just what many other brands experience at one point or other.
“Whether it’s Burberry or Nike or Gap, in some ways the story is super similar, which is we need to get back to reinventing disruptive and innovative products in our core categories,” he said. “We need to reignite our brand and make it relevant for a new generation. We need to win in the marketplace, and by that, I mean stop operating as a stores first or stores only model, and we need to become faster and more efficient and more agile.”
A six-month, company-wide review initiated by Heaf further pinpointed particular issues, finding that while Bath & Body Works pursued adjacent categories to attract new customers, it did not deliver the growth expected and instead reduced its focus on core categories.
“When you’re investing in laundry and you’re investing in men’s, you’re not investing in the things that we’re really famous for, which is fragrance, home fragrance, soaps and sanitizers and body care,” Heaf said. “As a result, you look at some of those core forms, because some of the vessels and packaging haven’t been updated since pre-COVID-19.”
Heaf noted that 90 percent of revenue in the business comes from those four categories. “The customer is demanding cleaner, more efficacious, modern design in terms of packaging, integrated elevated emotional storytelling and then market wide convenience,” he said, “and we just weren’t delivering on that.”
At the same time, collaborations that should have been used to drive excitement, energy and equity were used to carry quarters, while the retailer relied too heavily on deeper and more frequent promotions.
“My first day was on earnings. We delivered 3 percent on my first day, 1.5 percent on the second earnings call, which was [second quarter] and then -1 percent and -3 percent. That taught me some really important lessons,” Heaf said. “All that growth came from collabs and discounts. Neither of those are things that you can rely on in the future. Collabs, in my mind, are to inject energy and vibrancy in the brand. It shouldn’t be used to carry the quarter, and if you’re using discounting, eventually you run out of road. It wasn’t sustainable, and that was the reason why we went into that earnings call reset and outlined the new strategy.”
Called the Consumer First Formula, Heaf’s strategy aims to boost innovation in core categories and exit categories like hair and men’s grooming; reignite brand position through more targeted brand moments and deeper creator advocacy, and acquire new consumers by meeting them where they are. The latter will involves BBW launching on Amazon in 2026, after debuting in college book stores this year.
Bath & Body Works in college book stores.
But it’s not just launching in new retail spots. Heaf is also focused on overhauling BBW’s digital strategy, starting with the website.
“Bath and Body Works has the worst digital proposition I have ever seen,” Heaf said. “That’s not because the people here are not good. It’s because when you spin out of L Brands, the model was, we are a stores-based business, and so the online business grew up as a replenishment service for people who can’t make it to the store. So when I went and asked, ‘Why do we not have more than one photograph for each product?’ they’re like, ‘because they know what it looks like, because they already have it.’”
Heaf has worked aggressively to revamp the website, introducing homepage videos, mulitple images for each product, expanded product information and use images of models.
For innovation, it’s a holistic approach. “Innovation doesn’t mean one thing in this business,” Heaf said. “Compared to many of our competitors, our formulas are pretty clean. Have we put it in packaging that makes people think that that is true? Have we told that story effectively to consumers in stores, online? No,” he said.
“So to be innovative and move at the pace of the consumer requires product, brand, marketplace and packaging to all work in conjunction with each other,” he continued. “It’s not that we haven’t got innovative formulas. It’s just we haven’t put it with the right packaging, with the right messaging at the right time to deliver it.”
In terms of its customer base, Heaf said BBW has a very diverse base, with the bulk sitting on two ends of the spectrum: the over 35s, who have been loyal to the brand for a long time and the younger teenage customer. He sees his job as to capture the in between customer.
“We’re not tracking with them on their journey,” he said. “So we have this opportunity to bridge between two consumers that we already own.”
While Heaf has stressed that this turnaround will take time, in 12 months he is confident that the brand will feel different and relevant.
Inside a Bath & Body Works store
“You’re going to come across us on social in a way that will honor who we’ve always been as a brand, but relevant to today’s culture. You’ll click through to our website. You’ll think, this is amazing. What an unbelievable set of products and fragrances. I really want to go into their store. You’re going to go into their store and in store, there will be a cleaner, simpler assortment,” Heaf said. “That’s a lot to do. But in some ways, it’s not all about new ideas. It’s about making the job for the customer easier.”
