Struggling mall retailer closes stores, shares turnaround plan

American consumers have not abandoned malls.

"After a relatively subdued summer performance, malls rebounded sharply in October 2025, with foot traffic to indoor malls, open-air shopping centers, and outlet malls rising significantly both year over year (YoY) and month over month (MoM)," according to data from Placer.ai.

In fact, every type of mall saw a traffic rebound in October.

"All mall formats saw clear YoY visit gains in October 2025, potentially signaling renewed consumer enthusiasm heading into the holiday season. And although indoor malls led the growth — continuing their strong performance throughout 2025 — open-air shopping centers and outlet malls also returned to positive territory after four consecutive months of declines, underscoring the breadth and strength of the October recovery," the data provider shared.

The data suggests that consumer are getting an early start on the holiday shopping season, or that they are at least beginning to look for deals.

"The MoM data underscores the scale of this recovery. In October 2025, visits rose sharply compared to September 2025 — up 6.1% for Indoor Malls, 5.5% for Open-Air Shopping Centers, and 7.9% for Outlet Malls. In comparison, October 2024 saw only slight MoM increases of 0.5%, 2.1%, and 1.4%, respectively, compared to September 2024," Placer.ai reported.

But just because consumers visit malls does not mean that they are opening up their wallets. Foot traffic does not always equate with spending.

Bath & Body Works, a mall staple, has been moving its stores outside of mall locations, closing dozens of stores as part of that process.

Bath & Body Works reworks its store plan

Bath & Body Works' former CFO, Wendy C. Arlin, explained the chain's store plan at the Goldman Sachs retail conference.

"99% of our stores are cash flow positive. So it's great to look across the fleet and see that
we don't have any financial challenges in the real estate fleet. So I think that's the headline. We have strategically, as you pointed out, been focused on migrating our fleet to be more off-mall than in the mall," she said.

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That plan has been active since late 2022.

"So a lot of what — essentially, the stores that we're opening each year are in off-mall
locations and the stores that we're closing each year are in mall locations. So right now, we're at about 50-50. We think at the end state, it's probably about 2/3 mall, 1/3 on mall," she added.

Bath & Body Works store closures and openings:

• In its Q3 2025 earnings report, Bath & Body Works said it closed 34 company-operated stores but opened 73 new ones since February 1, 2025.
• So while it's closing some locations, it is also net expanding.
  Source: GlobeNewswire
• In Q2 2025, the company reported 24 U.S. store closures.
  Source: Bath & Body Works Investor relations

Bath & Body Works exits some malls

• Some of the closures are mall-based stores. For example, the chain exited the Meriden Mall in Connecticut.
  Source: Connecticut Post
• Meanwhile, it's also opening new, more modern stand-alone stores (not in malls).
• Example: A new “Gen Z‑focused” Bath & Body Works store opened in San Antonio with a fresh design and interactive features.
  Source: MySA

Bath & Body Works has a turnaround plan

Bath & Body Works CEO Daniel Heaf introduced the chain's turnaround plan when it reported third-quarter earnings.

“Today, we are excited to announce a comprehensive transformation plan to revitalize Bath & Body Works across brand, product, and marketplace. This plan, the Consumer First Formula, focuses our investments in our four largest revenue-driving opportunities — creating disruptive and innovative products, reigniting our brand, winning in the marketplace, and operating with speed and efficiency. These initiatives aim to attract new, younger consumers to the brand and unlock our next era of growth,” he said in a press release.

Bath & Body Works Q3 highlights

• Third-quarter net sales of $1.6 billion, down 1%.
• Earnings per diluted share of $0.37.
• The company reported net sales of $1,594 million for the quarter ended November 1, 2025, a decrease of 1% compared to net sales of $1,610 million for the quarter ended November 2, 2024.
• The company expects fourth-quarter 2025 net sales to be down high single digits, compared to $2,788 million in the fourth quarter of 2024.

"Our third quarter results were below expectations, and we are lowering our outlook for the remainder of the year reflecting current business trends and continuation of recent macro consumer pressures. While this is disappointing, we are acting swiftly and decisively to position the business for sustainable, long-term growth," Heaf said.

A look at Bath & Body Works' turnaround plan

Heaf shared the four-point plan.

1. Create Disruptive and Innovative Product: We will focus on reestablishing product leadership by creating innovative offerings focused on our core categories of body care, home fragrance, soaps, and sanitizers. Guided by deep consumer insights the company will deliver ingredient-led formulas, sensorial excellence, and elevated storytelling while simplifying our assortment to focus on trend-right innovation.
2. Reignite the Brand: We will work to reclaim our position as a cultural leader through bolder, more targeted brand moments and deeper creator advocacy. We will build enduring fragrance franchises around iconic scents, paired with elevated visual storytelling and social momentum across all consumer touchpoints.
3. Win in the Marketplace: We will acquire new consumers by meeting them where they are. Discovery will be effortless. We will continue to enhance our digital and in-store experiences, while expanding into new wholesale channels and marketplaces.
4. Operate with Speed and Efficiency: We will transform Bath & Body Works to be a faster and more efficient organization. Work has already begun, and we will continue to break down silos, speed up decision-making, and strengthen the agile operating model that makes this company great. Future growth will be funded through continued operational discipline. We have plans to deliver $250 million in cost savings over two years, with over half identified for 2026. These savings will be used to invest in revenue-generating initiatives across product and brand.

Analysts react to Bath & Body Works moves

“It truly is a head-scratcher,” said Sucharita Kodali, a Forrester analyst whose preteen daughters are fans of the brand, the Spokesman-Review reported. “There are so many things going against this company: It’s a mall merchant – that, alone, should have spelled doom. And it’s selling commodities that are broadly available elsewhere, often for cheaper. But somehow Bath & Body Works has figured out how to appeal to the masses.”

Even though the chain is leaving some malls, some analysts see Bath & Body Works as a sign that malls can work.

“To me, it’s Exhibit A that the mall is not dead,” John Morris, a senior analyst at D.A. Davidson told the same paper. “Bath & Body Works has found a way to get everyone into its stores, teens up to baby boomers.”

GlobalData Managing Director Neil Saunders, however, sees why the chain is leaving some malls.

“When you go into a second- or third-tier mall, a lot of stores look very gloomy or down on their luck. Bath & Body Works, though, stands out: It’s a shiny beacon that draws customers in,” he told ICSC.

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