Bad news for Vic­to­ria’s Se­cret

Times of Suriname - - ENGELS -

USA - Sin­ce L Brands said its Vic­to­ria’s Se­cret brand would stop sel­ling swim­wear and dial back on pro­mo­ti­ons, the com­pa­ny’s sha­res ha­ve plun­ged as stee­ply as one of its as­set-ba­ring bras.

But one ana­lyst fears the re­tai­ler’s woes may ex­tend be­yond this shift in stra­te­gy - me­a­ning a re­co­ve­ry in its stock pri­ce could ta­ke lon­ger than ex­pec­ted.

Jef­fe­ries ana­lyst Ran­dal Ko­nik on Mon­day down­g­ra­ded L Brands’ sha­res from hold to un­der­per­form, saying in­du­stry and con­su­mer trends could cau­se Vic­to­ria’s Se­cret to lo­se its do­mi­nan­ce in in­ti­ma­te ap­pa­rel. Among tho­se trends are a slow­down in spen­ding on the ca­te­go­ry and in­crea­sed com­pe­ti­ti­on from spe­ci­al­ty sto­res and on­li­ne start-ups. But per­haps mo­re im­por­tant­ly, Ame­ri­cans are mo­ving away from the “bombshell” look Vic­to­ria’s Se­cret has built its re­puta­ti­on on, and are in­stead stoc­king up on mo­re na­tu­ral, unst­ruc­tu­red bra­let­tes. Be­cau­se bra­let­tes are ea­sier to con­struct, they ma­ke it sim­pler for non­tra­di­ti­o­nal lin­ge­rie brands to chal­len­ge the stal­wart. Both Ame­ri­can Ea­g­le’s ae­rie lin­ge­rie li­ne and Ur­ban Out­fit­ters ha­ve re­cent­ly ci­ted the item as one trend fue­ling their sa­les. “We be­lie­ve the growth in po­pu­la­ri­ty of bra­let­tes is re­flec­ti­ve of a broa­der shift in the con­su­mers’ mind­set, par­ti­cu­lar­ly among youn­ger con­su­mers, which are in­cre­a­sin­gly re­jec­ting tra­di­ti­o­nal beau­ty standards in fa­vor of mo­re na­tu­ral, at­tai­na­ble looks,” Ko­nik told in­ves­tors. The ana­lyst poin­ted to a de­cli­ne in bre­ast aug­men­ta­ti­ons as one example of con­su­mers’ chan­ging tas­tes. Rough­ly 279,000 Ame­ri­can wo­men went un­der the knife in 2015, down from ne­ar­ly 331,000 three ye­ars ear­lier. It was the third con­se­cu­ti­ve year that num­ber had fal­len. And in its De­cem­ber is­sue, Vo­gue UK de­cla­red that showing clea­va­ge is no lon­ger fas­hi­o­na­ble.

As shop­pers’ de­fi­ni­ti­on of beau­ty has evol­ved, their in­te­rest in the Vic­to­ria’s Se­cret brand has al­so wa­ned, Ko­nik said. Whe­re­as 10 mil­li­on vie­wers tu­ned in­to the brand’s an­nu­al fas­hi­on show in 2011, that num­ber has sin­ce fal­len ne­ar­ly 30 per­cent.

Vic­to­ria’s Se­cret will key in­to the “na­tu­ral” trend when the event re­turns to CBS next month. This year’s show-stop­ping Fan­ta­sy bra is fas­hi­o­ned from its new “Beau­ti­ful” li­ne, which boasts push-up wit­hout the pad­ding.

Off the run­way, Vic­to­ria’s Se­cret is playing in­to the bra­let­te trend by of­fe­ring a broa­der as­sort­ment and pri­ce pro­mo­ti­ons in its sto­res. Yet tap­ping in­to the item’s po­pu­la­ri­ty co­mes with its own risks. Ko­nik no­t­ed the aver­a­ge pri­ce for a bra­let­te is rough­ly 60 per­cent lo­wer than a re­gu­lar bra, me­a­ning eve­ry 10 per­cent shift in sa­les mix to­ward the item would re­sult in a 7 cent per sha­re hit for L Brands, he esti­ma­tes.


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