Uh oh… it looks like somebody had a bad Christmas. L Brands Inc., the parent company of Victoria’s Secret, just announced they’ll be shuttering doors on no less than 53 locations of the lingerie brand, citing a drop in sales and a disappointing holiday season.
A drop in sales of 3 per cent over the Christmas period, combined with a fall of in-store sales by 7 per cent, meant shares in the parent company dropped by almost 9 per cent this week.
All of the closures will be in North America, and will see their actual square footage shrink by 3 per cent. To put that in context – they usually close around 15 stores in any given year. The holidays are normally seen as a reliable time to gift some undergarments, but even their PINK line, usually a teen fave, has seen a slide in sales.
According to Bloomberg, the company stated, “Given the decline in performance at Victoria’s Secret, we have substantially pulled back on capital investment in that business versus our history.” Sounds like a definitive move. Perhaps some of the change in management has something to do with it – after all, they lost long-term boss Sharen Jester Turney after more than ten years in 2016, followed by Jan Singer who stuck around only two years. The former president of Tory Burch, John Mehas was finally installed at Victoria’s Secret Lingerie this year, along with a new brand head at PINK. No pressure, but – they might have their work cut out for them turning this ship around.
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The numbers say as much about what’s been going on outside of Victoria’s Secret as within it. “The outlook illustrates that the lingerie-sales struggle will persist until the retailer finds a way to reconnect with shoppers on price, product and image,” said Bloomberg Intelligence analysts Poonam Goyal and Morgan Tarrant. That’s putting it tactfully.
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Indeed, the brand has endured its fair share of criticism, mainly that in an era of #MeToo and increased awareness of the hyper-sexualisation of women’s bodies, it’s uncomfortably tone deaf (not to mention, not very diverse). For our part, we’re not entirely surprised at its waning success. With ever-progressing cultural attitudes, the Victoria’s Secret brand looks outdated, and frankly out of touch. What’s more, the emergence of inclusive, body-positive, and diversity-championing brands like Savage x Fenty, American Eagle Outfitter’s Aerie, and ThirdLove mean they’re facing stiffer competition than ever. Target also recently threw their hats in the garment ring, announcing the launch of three new low-cost lines of swimwear and nightwear. Perhaps with that in mind, Victoria’s Secret has promised the return of its popular swimwear line online next month, which was originally discontinued in 2016.
For now, maybe L Brands Inc. will look to one of its other stores, Bath & Body Works, which saw a jump of 12 per cent same-store sales, for happier news.