CUPS FEEL EMPTY
Victoria’s Secret frays as competition firms up
Victoria’s Secret needs a guardian angel these days.
The iconic lingerie brand, famous for its supermodels dressed up as angels with fabulous feathery wings, is falling like Icarus from the sky.
Once seen as the company that could do no wrong, Victoria’s Secret has fallen hard over the past year, starting with its failure to identify a key fashion trend — the rise of the bralette — and continuing with its troubling exit from the swimwear and catalog business.
It embarrassingly exited swimwear last year.
On Thursday, the lingerie brand’s parent, L Brands, weighed down by Victoria’s Secret’s poor performance, delivered disappointing fourth-quarter results and warned Wall Street that its same-store sales at Victoria’s Secret could decline as much as 20 percent in February.
L Brands, which also owns Bath & Body Works and Pink, saw its shares crater 15 percent, to $48.94, in the wake of the news.
The news was particularly frustrating for investors because it’s not as though consumers have stopped shopping for intimates.
In fact, it’s the hottest apparel category, according to Credit Suisse analyst Christian Buss.
“Over the past couple of years, everyone from Macy’s to H& Mhasbeen investing in intimates,” Buss said.
Therein lies the problem for Victoria’s Secret, which ruled the category for decades but now is trying to swat away upstarts like Free People’s Lace Shop and American Eagle Outfitter’s Aerie brand.
Aerie has been posting same-store sales increases in the mid-20 percent range for the past five quarters.
The decade-old teen lingerie brand rose to new heights in the past few years when it began featuring models of all body types, stopped retouching photos and embraced the body positive movement.
The Victoria’s Secret Angels by contrast are “unrelatable” to its core customer, said Gabriella Santaniello, founder of A Line Partners, a retail research firm. “I think Victoria’s Secret’s brand image is working against it in the same way that Abercrombie & Fitch was hurt by too much sex in your face.”
Another problem for Victo- ria’s Secret is that it arrived late to the bralette trend and has been playing catch-up ever since.
The sportswear-like bras, which don’t have wires or molded cups, arrived in stores over the past couple of years.
When Victoria’s Secret trotted out its own version last March, it tried to sell them at higher prices, from $29 to $34.
By May, it slashed the prices to $20, according to Santaniello.
“They realized that everyone else was selling them for $20 and that they couldn’t charge a premium for them,” she said.
The bread and butter product for Victoria’s Secret, a bra costing $30 to $50 and up, is losing ground and shelf space to a product that costs much less.
Last February, L Brands ousted Victoria’s Secret Chief Executive Sharen Jester Turney, a 16-year veteran of the company. The company chairman and CEO, Les Wexner, took control of the brand.
Since then, Wexner has been spotted at area malls, particularly the Easton Town Center, near the company’s headquarters in Columbus, Ohio.
“We started to see Les at the mall all the time after March,” Santaniello said. “He’s very involved.” But whether th 79year-old retail genius can turn around the sagging brand remains an open question.