Shares of L Brands, whose main businesses are Victoria’s Secret and Bath & Body Works, are down 41% this year


StockMarketNews.Today


Shares of L Brands , LB -1.15% whose main businesses are Victoria’s Secret and Bath & Body Works, are down 41% this year. That is primarily due to slowing sales at Victoria’s Secret, particularly of bras, which make up 35% of L Brands’s sales. In July, Victoria’s Secret’s semiannual sale was so weak the retailer was forced to extend it by two weeks and offer steeper discounts, leading analysts to declare the brand broken.On Wednesday, The Wall Street Journal reported that Victoria’s Secret CEO Jan Singer is leaving.


Nintendo Switch – Neon Red and Neon Blue Joy-Con


The crux of the problem is that women are looking for a different kind of underwear and a different set of values. Instead of $60 padded bras that sell male fantasies, they are opting for cheaper undergarments that prioritize their own comfort. Victoria’s Secret has tried to adapt with the times, ending its catalog, doubling down on sports bras and even releasing a collection of “bralettes”—bras without underwire and padding.

It is a late adopter of the trend, however. The lingerie brand Aerie at American Eagle Outfitters got an early start selling bralettes. A host of online startups, like ThirdLove, are also gaining market share with underwear that caters to different body shapes and emphasizes ease and fit over glamour.

The style differences have been accompanied by a radical change in marketing. Aerie made a campaign out of its decision to stop retouching photos, called #AerieReal. ThirdLove features women of all ages, races and body types. Victoria’s Secret has tried to make the transition—for instance, by marketing its bralettes with the slogan, “No padding is sexy”—but a brand built on artifice doesn’t sell in an atmosphere that prizes authenticity.

As Jefferies analyst Randal Konik wrote in a note to investors after the departure of Ms. Singer, “The problem is the brand is not resonating with consumers, its pricing power is gone, its market share is under permanent attack, and the business is over-stored.”


secret


Last year, ratings for the Victoria’s Secret fashion show plunged 30% among 18 to 49 year-olds. (“Rudolph the Red-Nosed Reindeer,” which ran on the same network that evening, performed much better.) It is a safe bet that this year’s show, which will air on Dec. 2, will meet a similar fate. Chief marketing officer Ed Razek recently drew a backlash when he said the fashion show should not include transgender models since it is supposed to be “a fantasy.” (Criticism on social media prompted him to retract the statement.)



$100 Visa Gift Card (plus $5.95 Purchase Fee)


L Brands, which reports third-quarter earnings after the market close on Monday, saw some recovery in its stock after releasing October sales that showed a 4% comparable-sales increase over the same period last year. But that was mostly due to 11% sales growth at Bath & Body Works; Victoria’s Secret’s sales were flat.

Strong brands like Victoria’s Secret can be powerful forces, but when times change, that sharp sense of identity can make it harder to evolve. Combined with consumers deserting malls, where the retailer is heavily exposed, that means sales will likely keep dropping.

Advertisements


Categories: L Brands, Stock Markets

Tags: , , , ,

2 replies

Trackbacks

  1. Stocks tumble as Target and tech sector drop but there’s a darker message for investors in the tech sell-off – Stock Market News Today
  2. Target Corp. Beat Analysts’ Expectations For Its Earnings And Revenue – Today’s Stock Market News

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: