Bath & Body Works Shifts Strategy Away from Malls
The retailer plans to relocate most stores to off-mall centers following a 5.4% drop in quarterly store sales.
Updated on Oct. 20, 2026 in Retail
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As of August 1, 2026, Bath & Body Works reported a 5.4% decline in store sales at its U.S. and Canadian locations during the second quarter. In response, the company is shifting its footprint to prioritize off-mall shopping centers.
Why it matters
The company identified that customers find traditional mall layouts overwhelming and difficult to navigate. By moving to off-mall locations, the retailer aims to capitalize on higher traffic and conversion rates observed at those sites.
Bath & Body Works reported a 5.4% decline in quarterly store sales while seeing a 24.9% rise in international and other revenue. The company operated 1,937 stores as of August 1, 2026, after opening 37 locations and closing 27 in the first half of the year.
The players
Bath & Body Works
This American retail store chain specializes in soaps, lotions, fragrances, and candles and operates a large international network of storefronts.
Amazon
This multinational technology company provides a massive e-commerce platform that has recently expanded its partnerships with various beauty and retail brands.
Ulta Beauty
This prominent beauty retailer operates a large chain of stores across the United States that feature a wide range of cosmetics and skincare products.
The details
Bath & Body Works currently locates roughly 60% of its North American stores outside traditional malls and intends to reach a 75% target. To support this retail evolution, the company is also expanding distribution partnerships with Amazon and Ulta Beauty and reduced its free-shipping threshold to $50.
Timeline
May 2026: Management held the first-quarter earnings call.
Summer 2026: The company began implementing store navigation changes.
August 1, 2026: The firm operated 1,937 company-run stores.
August 2026: Management held the second-quarter earnings call.
Market Landscape
The retailer is responding to a broader industry trend where open-air shopping centers are outperforming indoor malls in consumer traffic and conversion. By aggressively expanding its off-mall presence, the company aims to secure better real estate performance against legacy retail models.
Shoppers can expect to find more storefronts located in convenient, accessible strip centers rather than inside large malls. Additionally, the company has lowered its free-shipping threshold to $50 to make online shopping more accessible for customers.
The takeaway
Retailers are increasingly prioritizing locations that offer convenience over traditional anchor-tenant configurations. Customers should expect more streamlined shopping experiences as brands adapt their physical footprints to match current consumer travel patterns.
Further reading
Find more analysis on shifting industry patterns at our Retail section.
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