More than 50 Victoria’s Secret stores will close due to declining sales

WHAT’S BEING CLAIMED:

  • Fifty-three Victoria’s Secret and PINK stores are closing in North America, its parent company, L Brands, Inc., announced on Wednesday.
  • Declining sales due to competition and failure to adapt to consumer demand are the main reason for the stores closing.
  • CEO Ed Razek’s comments in an interview about not casting plus-size models and transgender women also caused lasting controversy.

Despite a strong economy, Victoria’s Secret parent company, L Brands, Inc., announced Wednesday that it plans to close 53 stores this year, citing a drop in sales as the reason.

On the other hand, Bath and Body Works, the company’s other flagship brand, is doing well. Unlike other retailers, Victoria’s Secret and its teen brand PINK have struggled in sales.

Its failure to adapt to consumer demand for more custom-fitted bras may be the reason behind the sales drop. Lingerie trends have changed, but Victoria’s Secret still stuck to the same playbook: push-up bras and celebrity models.

In a call with marketing analysts on Thursday, L Brands CEO Stuart Burgdoefer said the company has been “more promotional than we would like over the last several years.”

Victoria’s Secret’s CEO resigned in December and its annual glittery fashion show received the worst ratings ever. Last year, 30 of its stores closed. There are still over 950 Victoria’s Secret stores nationwide.

Over the last two years,  Victoria’s Secret has lost 3.8 million customers to competitors like Amazon and American Eagle’s Aerie, GlobalData Retail analyst Neil Saunders estimated.

Competition has also increased as startups like Adore Me and ThirdLove have lured Victoria’s Secret’s customers by offering better-fitting bras and using ‘regular’ women, not celebrity models, in advertising.

Big retailers, like Target, also threaten Victoria’s Secret by launching a new bra and underwear brand for women and teenage girls called Auden. Auden bras cost only $22 and under.

Victoria’s Secret did not rule out ending the fashion show or using more inclusive marketing. But Jefferies analyst Janine Stichter said that shifting its image could be difficult.

“People identify Victoria’s Secret with what’s it been for the last 20 years — very sexy and airbrushed models,” Stichter said. “If they were going to pivot now, I don’t think it would come off as authentic. They don’t have a great option.”

Victoria’s Secret CEO Ed Razek hinted late last year that people aren’t interested in seeing plus-size angels on Victoria’s Secret runway.

“We attempted to do a television special for plus sizes (in 2000). No one had any interest in it, still don’t,” the CEO said.

Another controversy was when he said that transgender women should not be cast in shows.

Razek has since apologized on Twitter, clarifying that he would be fine with casting transgender models.

 

Source: TODAY

 

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