Risk Factors

THE COVID-19 PANDEMIC HAS HAD AND MAY CONTINUE TO HAVE AN ADVERSE EFFECT ON OUR BUSINESS.

The COVID-19 pandemic continued to impact our business and results of operations in fiscal year 2021. While many of our stores were open for most of the year, reduced consumer confidence and changes in shopping patterns adversely impacted store traffic during certain portions of the year, as more consumers were either not shopping or choosing to shop online as a result of the COVID-19 pandemic. Additionally, resurgences of COVID-19 cases led to temporary store closures for portions of the year in certain markets and have impacted, and continue to impact, our supply chain partners. Current vessel, container and other transportation shortages, labor shortages and port congestion globally have delayed and may continue to delay inventory orders.

Conversely, in the first quarter of 2021, our operating results benefited from customers receiving government stimulus payments related to the COVID-19 pandemic. These stimulus payments are not expected to be reinstated in the near term. During this period, we are focused on protecting the health and safety of our customers, associates, contractors, suppliers and other business partners. Due to the uncertainty of COVID-19 and the speed at which the pandemic continues to impact our markets, we are continuing to assess the situation, including governmentimposed restrictions, market by market.

We are unable to accurately predict the full impact that COVID-19, including the potential of new variants (which may be more contagious or severe, and may be less responsive to vaccines or treatments), will have on our operations going forward due to uncertainties which will be dictated by the length of time that such disruptions continue. Actions taken to limit the spread, and the public’s willingness to comply with such actions, the availability and efficacy of a vaccine and positive treatments for COVID-19, and the impact of governmental regulations that might be imposed in response to the pandemic.

Numerous state, local and foreign jurisdictions have imposed, and others in the future may impose, shelter-in-place orders, quarantines, executive orders and similar government orders and restrictions for their residents to control the spread of COVID-19. COVID-19 will have on our longer-term operations as well, particularly with respect to our current mix of merchandise offerings, event-based categories and store traffic trends.

WE MAY NOT REALIZE THE ANTICIPATED BENEFITS FROM THE SEPARATION, WHICH COULD HARM OUR BUSINESS.

On August 2, 2021, we completed the separation of the Bath & Body Works and Victoria’s Secret businesses. We may incur significant additional expenses and challenges in connection with the separation of the Victoria’s Secret business, which may include expenses and challenges related to our separation from the Victoria’s Secret information technology environment.

We are now a smaller and less diversified business than before the Separation, which could make us more vulnerable to changing market and economic conditions. Additionally, a potential loss of synergies from the Separation could negatively impact our results of operations, financial condition and cash flows. In addition, we may not be able to achieve the full strategic and financial benefits that are expected to result from the Separation and the anticipated benefits of the Separation are based on a number of assumptions, some of which may prove incorrect. If we fail to achieve some or all of the benefits expected or if such benefits are delayed, our business could be harmed.

TURNOVER IN COMPANY LEADERSHIP OR OTHER KEY POSITIONS MAY HAVE AN ADVERSE IMPACT ON COMPANY PERFORMANCE.

We may experience changes in key leadership or key positions in the future. The departure of key leadership personnel can result in the loss of significant knowledge and experience. Failure to attract and retain the right talent, or to smoothly manage the transition of responsibilities resulting from such turnover, could affect our ability to meet our challenges and may cause us to miss performance objectives or financial targets or disrupt our relationships with our customers or other third-parties.

On February 22, 2022, our Board appointed then Board Chair Sarah E.Nash as Executive Chair. Effective May 12,2022, Ms. Nash will be appointed Interim CEO, and Andrew M. Meslow will step down as CEO and as a member of the Board due to health reasons. Our Board is in the process of retaining a national search firm to assist in identifying a permanent CEO. Such leadership transitions can be inherently difficult to manage, and an inadequate transition may cause disruption to our business, including to our relationships with our associates and other third-parties.

VICTORIA’S SECRET & CO. CONTINUES TO PROVIDE TECHNOLOGY SERVICES TO US. ANY INADEQUACY OR SECURITY FAILURE OF THIS TECHNOLOGY COULD HARM OUR ABILITY TO OPERATE.

Our ability to effectively manage and operate our business depends significantly on information technology systems. We rely heavily on applications related to point-of-sale, e-commerce, merchandising, planning, sourcing, logistics, inventory management, data security and support systems including human resources and finance currently supplied to us by Victoria’s Secret & Co. pursuant to the TSA that we entered into in connection with the Separation. Victoria’s Secret & Co. is not in the business of providing information technology outsourcing services and does not have experience providing such services for third-parties.

Victoria’s Secret & Co. may not successfully execute all of these services during the transition period or we may have to expend significant efforts and/ or costs materially in excess of those estimated by us to transition such services to our information technology systems and we may experience delays in such transition period. Any interruption in, or deficiency of, these services could have a material adverse effect on our business, results of operations, financial condition and cash flows.

We source merchandise and materials directly in domestic and international markets. We distribute merchandise and other materials globally to our partners in international locations. Many of our imports and exports are subject to a variety of customs regulations and international trade arrangements. We compete with other companies for production facilities.

We also face a variety of other risks generally associated with doing business on a global basis. For example:

• political instability, environmental hazards or natural disasters which could negatively affect international economies, financial markets and business activity;

• significant health hazards or pandemics, which could result in closed factories and or stores, reduced workforces, scarcity of raw materials, and scrutiny or embargoing of goods produced in infected areas;

• imposition of new or retaliatory trade duties, sanctions or taxes and other charges on imports or exports;

• evolving, new or complex legal and regulatory matters;

• volatility in currency exchange rates;

• local business practice and political issues (including issues relating to compliance with domestic or international labor standards) which may result in adverse publicity or threatened or actual adverse consumer actions, including boycotts;

• delays or disruptions in shipping and transportation and related pricing impacts;

• disruption due to labor disputes; and maintaining close relationships with our vendors and their ability or willingness to sell quality products to us at favorable prices and terms. Many factors outside of our control may harm these relationships and the ability of these vendors to sell us products.

• changing expectations regarding product safety due to new legislation or other factors.

Disruptions or delays in shipments may have negative impacts to pricing of certain components of our products. The pandemic continues to have the potential to significantly impact our supply chain if the factories that manufacture our products, the distribution centers where we manage our inventory, or the operations of our logistics and other service providers are disrupted, are temporarily closed or experience worker shortages.

In addition, the impact of COVID-19 on macroeconomic conditions may impact the proper functioning of financial and capital markets, foreign currency exchange rates, commodity prices, and interest rates. Even after the COVID-19 global pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic recession that has occurred or may occur in the future.

We rely on a limited number of vendors to support our inventory purchasing needs. In fiscal year 2021, our largest vendor supplied approximately 12% of our total merchandise purchases and our largestfive vendors supplied approximately 35% of total merchandise purchases combined. Our business depends on developing and

We purchase products from third-party vendors. Factors outside our control, such as production, shipping delays, quality problems or natural disasters, could disrupt merchandise deliveries and result in lost sales, cancellation charges or excessive markdowns.

In addition, quality problems could result in product liability judgments or widespread product recalls that may negatively impact our sales and profitability for a period of time depending on product availability, competition reaction and consumer attitudes. Even if product liability claims are unsuccessful or are not fully pursued, the negative publicity surrounding any assertions could adversely impact our reputation with existing and potential customers and our brand image.

Our business could also suffer if our third-party vendors fail to comply with laws and regulations. While our internal and vendor operating guidelines promote ethical business practices and our associates and third-party compliance auditors visit and monitor the operations of our third-party vendors, we do not control these vendors or their practices. The violation of labor, environmental or other laws by third-party vendors used by us could interrupt or otherwise disrupt the shipment of finished products to us or damage our reputation.

WE SIGNIFICANTLY RELY ON OUR AND OUR THIRD-PARTY SERVICE PROVIDERS’, INCLUDING VICTORIA’S SECRET & CO., ABILITY TO IMPLEMENT AND SUSTAIN INFORMATION TECHNOLOGY SYSTEMS AND TO PROTECT ASSOCIATED DATA AND SYSTEM AVAILABILITY.

Our success depends, in part, on the secure performance of our and our third-party services providers’ and vendors’ information technology systems. Our information technology systems, as well as those of our providers and vendors, are vulnerable to damage, interruption or breach from a variety of sources, including cyberattacks, ransomware attacks, telecommunication failures, malicious human acts and natural disasters.

The increased use of mobile devices may also heighten other operational risks. Sustained or repeated system disruptions that interrupt our ability to process orders and deliver products to the stores, impact our customers’ ability to access our websites and mobile applications in a timely manner, or expose confidential customer information, merchandise, financial or other important information (including personal information) could have a material adverse effect on our results of operations, financial condition and cash flows.

As a result of the Separation, we have entered into a multi-year TSA with Victoria’s Secret & Co. for information technology services and systems to support the day-to-day needs for most areas of technology. Over time, we will transition the information technology capabilities from Victoria’s Secret & Co. to implement point-of-sale, mobile applications, merchandising, planning, sourcing, logistics, inventory management, human resources and financial systems on to our own platforms, some of which are yet to be established.

Such incidents could disrupt our operations including our ability to ship and track product orders and project inventory requirements, and lead to interruptions or delays.

As systems are provided, supported and managed by Victoria’s Secret & Co., and eventually transitioned to us, we will be required to establish a number of new information technology systems. Which could have a material adverse effect on our operations, financial condition and cash flow.