Intima Asia
30 November 2018
Big changes are coming for the lingerie giant: Victoria's Secret has announced a new CEO and, after discontinuing its popular swimwear collection in 2016, plans to bring back swim for 2019.
Timed to the brand's runway show, which took place earlier this month, Victoria's Secret made two major announcements this week. The first is the appointment of a new CEO, John Mehas (pictured left), currently president of Tory Burch, to replace outgoing CEO Jan Singer early next year.
The second important change is that the brand will be relaunching its swim collection in spring of 2019, which it scrapped at the end of 2016. At the time, the closure of the popular swim line came as a surprise, with sales declining as a result. In its 2017 fourth-quarter earnings, reported in February this year, the company admitted that its decision to end this category was still having a negative impact on business.
"For the 53 weeks ended Feb. 3, 2018, the exit of the swim and apparel categories had a negative impact of about 3 percentage points and 5 percentage points to total company and Victoria's Secret comparable sales, respectively," noted the earnings press release from L Brands, parent company of Victoria's Secret.
Swimwear once represented a $500 million part of Victoria's Secret business, accounting for 6.5% of its sales, but Les Wexner, CEO of L Brands, opted to abandon it to focus on undergarments as the core of the business. Victoria's Secret once dominated the underwear market in the U.S., but recent years have seen it lose market share to brands like American Eagle's unphotoshopped Aerie and others, many founded by women, that promote body positivity and inclusivity in their ad campaigns. Same-store sales numbers plummeted 6% at Victoria's Secret stores during the most recent quarter, down 2% overall including the brand's online channels. Sales of the brand's structured push-up bras ($50 and up) have stagnated in favor of T-shirt bras (selling in the mid-$20s) and the seamless Illusion bra line ($32-53), according to a phone call between L Brands and analysts. Leadership hopes that with a new CEO at the helm, plus product diversification, sales will be boosted as the brand receives a much-needed revitalization. Licensing agreements are also in the works to sell items such as UGG products and eyewear.
Stuart Burgdoerfer, CFO of L Brands, explained that the decision to bring back swimwear was based on customer feedback. "Fundamentally it is about what the customer is telling us," he said.
Top photo: Victoria's Secret, 2016
Lower right photo: Victoria's Secret, 2015
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