L Brands, the company that owns Victoria’s Secret, promises shoppers that it would see an “evolution” in the brand.
At the company’s L Brands’ Investors Day held last Tuesday, the head of Victoria’s Secret Lingerie John Mehas said: “There’s a big belief in the company that we need to evolve.”
L Brands admits that its Victoria’s Secret stores clung to its sexy imaging for a long time even when shoppers were looking for options that were more comfortable and inclusive.
For the longest time, Victoria’s Secret was boosted by its sexy image. However, consumers have steered away from their lacy and bejeweled product offerings, opting to explore brands like Knix, Third Love, Aerie, and many others.
According to Mehas, the brand is now looking for a way to reconnect with its shoppers by offering something new. As part of the brand evolution, it’s looking at bringing in new products, new marketing, and new executives to Victoria’s Secret.
In its commitment to evolving, it would be including a more diverse group of models in its advertising and marketing efforts. By doing this, it would reflect women of all sizes and shapes.
In its second-quarter earnings, L Brands reported that its revenue dropped from $2.98 billion to $2.90 billion and it fell short of the $2.95 billion estimates. Victoria’s Secret’s same-store sales for the quarter dropped 6%.
Despite its revenue being pulled down by Victoria’s Secret, L Brands still has Bath & Body Works. In the last quarter, the same-store sales of this brand increased to 8%.
In response to the revenue report, L Brands’ management said: “Looking to the second half of the year, our number one priority continues to be improving performance at Victoria’s Secret.”
L Brands’ stocks have fallen more than 28% since the year started. Over the past three years, the brand’s stocks have cumulatively fallen up to 40%. In 2019, it slashed its annual dividend in half to $1.20.
As it moves toward changing the brand’s landscape and its products, L Brands has parted ways with long-time chief marketing officer of Victoria’s Secret and its sister brand, Pink, Ed Razek.
In early August, it was reported that Razek would be leaving Victoria’s Secret. Razek has been with the brand since the 1980s.
To make way for the brand’s evolution, Mehas has put a spotlight on a new approach. It will now include more wireless bra options in its product line. It would also highlight matching bras and panties.
Mehas has also spoken about experimenting with carrying other brands in Victoria’s Secret stores such as Bluebella and Livy. It’s also working on a collaboration with For Love and Lemons.
The brand is also rethinking its annual Victoria’s Secret Fashion Show which has suffered from declining viewership over the past couple of years.
As for Victoria’s Secret sister brand, Pink, its CEO, Amy Hauk, is committed to learning from the company’s mistakes. She said the number one priority is to reclaim the collegiate market.
Pink is now set to focus on the “power of femininity”. L Brands is expecting it can grow the sales of its Pink Sport to $1 billion.
However, according to Jeffries analyst Randal Konik, this might be tough for the company given the fact that the brand’s same-store sales have double-digit declines in the past three quarters. Konik also thinks that sales at the division could fall by over 50% in the next 18 to 24 months.