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The profits of Victoria's Secret dropped while its sales were mainly down. Photographer: Christopher Dilts / Bloomberg© 2017 Bloomberg Finance LP
Victoria's Secret, once hot, loses its cool and even airing the annual Angels fashion show would not have the potential to make a big difference, if any.
The US-based lingerie brand, number one in the United States, recorded a further 2% drop in comparable sales, driven by a 6% decline in physical stores in the quarter ended Nov. 3. that's not even the big deal: the unit, which has nearly 1,200 stores in North America and more than half of L Brands' total sales, continues to be a radical departure from his role as a former contributor to profits. Victoria's Secret saw its third-quarter fiscal year operating profit drop by 89%, a whopping $ 120 million, to $ 14.2 million. In contrast, Bath & Body Works, its sister channel that had already fallen behind, continued to outperform with a 13% increase in its comparable sales and a 29% increase in operating income.
On the international stage, also led by Victoria's Secret, the loss has widened significantly.
Shares of L Brands, after losing more than two-fifths of their value this year, gave up more than 4% after the publication of their results Monday afternoon.
L Brands said the quarterly dividend was cut in half to $ 1.20 a share, starting in March, to save about $ 325 million. That's why L Brands saw its cash flow plummet 53% to $ 348 million at the end of the quarter. The company also announced that it would close all of its high-end boutiques Henri Bendel and explore the options for its lingerie chain acquired La Senza.
"Our number one priority is to enhance the performance of Victoria's Secret Lingerie and PINK," said Leslie Wexner, President and CEO, in a statement. "We have lost our close relationship with our client … .Our new leaders bring us a new perspective and turn to all … our marketing, brand positioning, internal talent, real estate portfolio and cost structure. Most important improve our assortment of goods. "
L Brands on Monday named Tory Burch, President and former President and CEO of Club Monaco, John Mehas, as CEO of Victoria's Secret Lingerie, beginning in early 2019, replacing Jan Singer, who resigned. He has also been named new general manager for his pink label aimed at university-aged consumers.
However, Mehas will have a heavy task ahead of him. Victoria's Secret has to deal with the decline in customer traffic, not just because of what the company has described as the "cumulative impact" of its decision to leave the swimming and clothing business and to get rid of catalogs and promotional offers by direct mail. admitted was "poor assortment."
The traditional identity of the brand and the glamorous appearance of its Angels at the center of the presentation of its brand lose more and more relevance to a growing number of consumers seeking to express themselves as they are and privilege brands that they consider more authentic. For example, the rival of the Victoria's Secret shopping center, Aerie, owned by American Eagle and known for its #AerieReal slogan because it features real characters in their natural appearance, has expanded its market share from 2.3% in 2017 to five years. Victoria's Secret's share in the same period fell by 2 percentage points to 28.8% over the same period, according to Euromonitor.
Online, ThirdLove, backed by a former Victoria's Secret executive, and now Bare Necessities, owned by Walmart, speaks of enlarged sizes for all body types, but is also eager to steal the thunder of Victoria's Secret.
Yes, as Wexner said in her prepared remarks, Victoria's Secret still enjoys the "competitive advantage" of a billion visits to its stores each year. The brand unveils new bras, panties, nightwear and pink loungewear to meet the demand. It also plans to expand its range to include glasses, shoes and swimwear, a previously discontinued category, in reversing its previous decision.
However, although Victoria's Secret has a "dominant market share" with "high emotional content, strong customer engagement via social media and in-store experiences," it still has a lot of work to do to find what his brand represents exactly. for in the changing cultural climate of today. A poignant example: The comment of the company's marketing director, Ed Razek, in a recent Vogue interview about whether Victoria's Secret would consider introducing a transgender model into his fashion show, has prompted many harsh critics. "No, I do not think we should. Well, why not? Because the show is a fantasy. "
Standing behind what Razek thinks the brand should represent may be one thing, but being in tune with the signs of the times and what today 's consumers can value in one brand is another.
Victoria's Secret will have to find a way to quickly reach that delicate balance. After all, social media enthusiasts are even less tolerant and their voices weigh much more heavily.
Forbes related: sustainability is no longer an afterthought in the fashion industry
Lululemon Founder: I want brands to defend something
Related to Forbes: Why Walmart Has Just Purchased Bare Necessities
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The profits of Victoria's Secret dropped while its sales were mainly down. Photographer: Christopher Dilts / Bloomberg© 2017 Bloomberg Finance LP
Victoria's Secret, once hot, loses its cool and even airing the annual Angels fashion show would not have the potential to make a big difference, if any.
The US-based lingerie brand, number one in the United States, recorded a further 2% drop in comparable sales, driven by a 6% decline in physical stores in the quarter ended Nov. 3. that's not even the big deal: the unit, which has nearly 1,200 stores in North America and more than half of L Brands' total sales, continues to be a radical departure from his role as a former contributor to profits. Victoria's Secret saw its third-quarter fiscal year operating profit drop by 89%, a whopping $ 120 million, to $ 14.2 million. In contrast, Bath & Body Works, its sister channel that had already fallen behind, continued to outperform with a 13% increase in its comparable sales and a 29% increase in operating income.
On the international stage, also led by Victoria's Secret, the loss has widened significantly.
Shares of L Brands, after losing more than two-fifths of their value this year, gave up more than 4% after the publication of their results Monday afternoon.
L Brands said the quarterly dividend was cut in half to $ 1.20 a share, starting in March, to save about $ 325 million. That's why L Brands saw its cash flow plummet 53% to $ 348 million at the end of the quarter. The company also announced that it would close all of its high-end boutiques Henri Bendel and explore the options for its lingerie chain acquired La Senza.
"Our number one priority is to enhance the performance of Victoria's Secret Lingerie and PINK," said Leslie Wexner, President and CEO, in a statement. "We have lost our close relationship with our client … .Our new leaders bring us a new perspective and turn to all … our marketing, brand positioning, internal talent, real estate portfolio and cost structure. Most important improve our assortment of goods. "
L Brands on Monday named Tory Burch, President and former President and CEO of Club Monaco, John Mehas, as CEO of Victoria's Secret Lingerie, beginning in early 2019, replacing Jan Singer, who resigned. He has also been named new general manager for his pink label aimed at university-aged consumers.
However, Mehas will have a heavy task ahead of him. Victoria's Secret has to deal with the decline in customer traffic, not just because of what the company has described as the "cumulative impact" of its decision to leave the swimming and clothing business and to get rid of catalogs and promotional offers by direct mail. admitted was "poor assortment."
The traditional identity of the brand and the glamorous appearance of its Angels at the center of the presentation of its brand lose more and more relevance to a growing number of consumers seeking to express themselves as they are and privilege brands that they consider more authentic. For example, the rival of the Victoria's Secret shopping center, Aerie, owned by American Eagle and known for its #AerieReal slogan because it features real characters in their natural appearance, has expanded its market share from 2.3% in 2017 to five years. Victoria's Secret's share in the same period fell by 2 percentage points to 28.8% over the same period, according to Euromonitor.
Online, ThirdLove, backed by a former Victoria's Secret executive, and now Bare Necessities, owned by Walmart, speaks of enlarged sizes for all body types, but is also eager to steal the thunder of Victoria's Secret.
Yes, as Wexner said in her prepared remarks, Victoria's Secret still enjoys the "competitive advantage" of a billion visits to its stores each year. The brand unveils new bras, panties, nightwear and pink loungewear to meet the demand. It also plans to expand its range to include glasses, shoes and swimwear, a previously discontinued category, in reversing its previous decision.
However, although Victoria's Secret has a "dominant market share" with "high emotional content, strong customer engagement via social media and in-store experiences," it still has a lot of work to do to find what his brand represents exactly. for in the changing cultural climate of today. A poignant example: The comment of the company's marketing director, Ed Razek, in a recent Vogue interview about whether Victoria's Secret would consider introducing a transgender model into his fashion show, has prompted many harsh critics. "No, I do not think we should. Well, why not? Because the show is a fantasy. "
Standing behind what Razek thinks the brand should represent may be one thing, but being in tune with the signs of the times and what today 's consumers can value in one brand is another.
Victoria's Secret will have to find a way to quickly reach that delicate balance. After all, social media enthusiasts are even less tolerant and their voices weigh much more heavily.
Forbes related: sustainability is no longer an afterthought in the fashion industry
Lululemon Founder: I want brands to defend something
Related to Forbes: Why Walmart Has Just Purchased Bare Necessities
