Victoria’s Secret’s Continued Transformation

Victoria’s Secret’s makeover continues. 

Most recently, the lingerie and beauty retailer added size-inclusive lingerie start-up Adore Me to the portfolio. That was after scooping up a minority stake in Los Angeles-based swimwear brand Frankies Bikinis earlier last year.

And this week, the company said Amy Hauk, who became chief executive officer of the Victoria’s Secret brand in a restructuring in July, would retire and leave the company as of March 31 to spend more time with her family. Hauk has also led the Pink business since 2018.

With her departure, Martin Waters, corporate CEO, will assume the responsibilities of brand CEO as well, putting him more firmly in control of the company’s key brand while the broader evolution continues.

It’s a transformation that has also included the firm’s spinoff as its own public company on the New York Stock Exchange, store renovations, more inclusive marketing materials, a partnership with Amazon, a new tween brand and an updated assortment that includes things like maternity wear, plus sizes and adaptive innerwear.

The company that was once known for its hyper-sexualized lingerie, models that many deemed to be too skinny, televised fashion shows and dark stores has since axed the catwalk extravaganza, cast a more diverse lineup of models and tried to position itself as an advocate for all women.

Waters said it’s just the beginning. 

“We’re two years into what I consider to be a five-year journey of recovery,” Waters told analysts during the firm’s investor day in Chicago this past October.

More collaborations and partnerships are coming, the CEO told WWD during the investor day, either by way of VS&Co-Lab — a platform that highlights third-party brands — or possible acquisitions.

“Sometimes it makes sense for us to partner with a business, a brand, who brings a different customer, or operates in a different category, or somehow brings a halo to the Victoria’s Secret brand,” Waters said at the time. “In other cases, we may say, that brand is interesting and we should make a strategic investment in that brand. Not only do we want to partner with them to offer it to our customers, but we want to be part of their journey. And that’s typically where we think we can leverage our skill set and capability to help that business. So, are there more businesses that would benefit from our capabilities and resources and stores, running digital and manufacturing? I think so.”

There’s also the fashion show, which Waters described as “a really valuable marketing asset” and said the company would bring back in a new way, although he declined to say when or give specifics.

“It will just be really different in its reincarnation than it was in its past. It will be a global celebration of womanhood,” Waters said.

But attracting new consumers, or winning back old ones who left amid the #MeToo movement — and after L Brands’ Founder Leslie Wexner’s mysterious relationship with registered sex offender Jeffrey Epstein was revealed — won’t be easy. (L Brands formerly owned Victoria’s Secret.) Some consumers are still skeptical of the changes. Waters himself said many consumers aren’t even aware of the changes yet.

There’s also the persistent problem of inflation and consumers who, on both sides of the pond, are increasingly cash strapped and stretched to make ends meet. Like many retailers, Victoria’s Secret has responded by increasing promotional sales.

The retailer fell short in the third quarter on both the top and bottom lines, slashing its fourth quarter outlook as a result. But Waters added during the December conference call that since Black Friday, consumers had been “stocking up, looking to buy Christmas gifts.”

“We’re in for a tough December all around across retail and we need to be prepared to sharpen our elbows and fight as hard as we can,” Waters said the first week of December.

“Our guidance for the quarter reflects our results to date and the expectations that we’ll need to be aggressive in December to get our fair share and more of consumer spending this holiday season,” the CEO added. “We remain mindful of the continued economic headwinds and pressure on our customer that will likely drive a highly promotional retail environment. As such, we expect continued sales and margin volatility.”

Waters also pointed out some tailwinds for the company, such as the lucrative beauty business and international segments. Just before the holidays, the firm doubled down on its pledge (which it first revealed during the October investor day) to grow Victoria’s Secret’s revenues to the range of $7.3 billion to $7.4 billion by 2025.

Whether consumers will buy into the new Victoria’s Secret is yet to be determined. But so far, investors are not biting: Shares of Victoria’s Secret are down more than 17.5 percent, year-over-year.

Reports /TrainViral/