Victoria’s Secret retail stores have continued to struggle, scaring away investors from the parent company L Brands.
In 2016, Victoria’s Secret decided to abandon swimwear and apparel categories to focus solely on lingerie, beauty and the Pink brand. The company’s reasoning seemed to be that those other categories weren’t performing as well as others, and it would narrow focus on the ones that preform best. As a result, according to a report from World Net Daily, Victoria’s Secret sales declined every single month last year. Things were worse in the first half of the year, with declines between 10 and 14 percent most months. Towards the end of the year, those declines shrank slightly to the single digits, according to Fashionista.
Ohio Based L Brands is a Fortune 500 fashion retailer, who’s flagship brands include Victoria Secret, Bath & Body Works and Pink (sold exclusively at Victoria Secret). Their other brands include Henri Bendel, an upscale women’s specialty store who’s flagship store is located on 5th Ave in NYC (over 20 stores in total) , and lingerie and intimate apparel brand, La Senza, with over 300 locations worldwide.
Bath & Body Works in store sales have been strong, with a 6% increase last year. With e-commerce taken out, Victoria’s Secret same-store sales plummeted 6% after a 2% decline a year ago, and Bath & Body Works added 4%, for an overall 2% same-store sales decline at L Brands stores, according to Retail Dive blog.
Some fashion industry analysts claim changing attitudes toward body images have contributed to the slow but steady decline of Victoria Secret. Some say the commitment to sexier lingerie fashion is what is dragging them down. Many claim women are turning to comfort over “sexy”.
“Turning to 2018, we’re very focused on improving performance in the Victoria’s Secret business, staying close to our customer, improving the customer experience in stores and online, and improving our assortments in compelling new product launches,” L Brands CFO Stuart Burgdoerfer told Retail Dive. “We will continue to be disciplined in the management of inventory, expenses and capital”, Burgdoerfer said.
Some believe the problems with Victoria Secret are simpler than “changing body attitudes”. Business Insider ran a report on the actual retail stores itself recently and determined the display and arrangement of the products make it difficult to find anything, the checkout lines are confusing and slow, and the prices are simply too high. Rebecca Harrington of Business Insider said in her report “it was virtually impossible to find anything”.
Investors will continue to keep an eye on how L Brands handles Victoria Secret Retail locations and products in general. L Brands stock has consistently slid since it peaked in 2015 with a price of close to $100 a share, as of press the stock (LB) is trading in the $44 range.
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