Swimwear is returning to Victoria’s secrets.
After three years of vacation, the retailer said it will bring the swimsuit back to Victoria’s secrets in the spring, as part of a broader reassessment of its business, and will also close it as the new leader John Mehas’s Store. Corner office.
Going back to swimwear is to win back the previous $525 million shopper and increase store and online traffic. Victoria’s Secret will also add Ugg boots, eyewear and other franchises to its stores and websites.
Underwear companies are still the leader in the field of underwear, but have lost market share over the years as consumers move from more inclusive brands that offer more choices to bras and underwear. Victoria’s Secret stopped its swimwear collection in the spring of 2016 and stopped its popular catalog at the same time. Both of these initiatives have had a negative impact on the business.
Ike Boruchow, an analyst at Wells Fargo, said, “We believe that closing this category may have eliminated a meaningful transportation driver and shut down loyal consumers.”
Victoria’s secret sales in the store and online decreased by 2% in the third quarter of 2018 – down 4% in the same period last year. Net sales for the quarter fell 0.7% to $1.53 billion. L Brands, the parent company of Victoria’s secret, earned only one-third of its $103 million last year, compared to $319 million.
In a conference call with analysts on Tuesday, L Brands’ chief financial officer Stuart Burgdoerfer said the decision to eliminate the swimming department was a matter of professional retailers trying to focus on it: underwear.
But after reassessing the situation, Victoria’s secret “will not spend a lot of time reviewing frankly,” Burgdoerfer said. “We are here.
“But when we assess today’s situation, [we have already made] a very important decision, we think it is a good choice to re-enter the swimming business again, mainly driven by the customer feedback we receive,” he Say.
Other reassessment plans include reducing real estate, such as “significant reductions” in small stores and North American stores in China, and bringing new leadership.
The company said Toy Burch’s Mehas will join Victoria’s Secret in early 2019 as head of the lingerie division. Mehas is replacing Jan Singer, who unexpectedly resigned as CEO.
“He is a very successful retail leader. His reputation is high,” Burgdoerfer talked about Mehas.
Boruchow of Wells Fargo said that Victoria’s secret boycott of change was the cause of the decline in sales. The company has not closed any of the Victorian Secrets stores in North America, even though the retail business has more businesses online, and has opened 500 new stores internationally in the past five years.
The analyst pointed out that Victoria’s secret is in “the peak store in North America. I don’t know any other companies we track have peak stores.”
But a series of recent changes, including the closure of Henry Bender, are “a powerful offensive by [L Brands], which we think is beneficial,” Boruchow added.
Burgdoerfer said that the decision to close the US store would be “a financial decision. But it is to consider the sales transfer of nearby stores… So simply, what is the cost of exiting the store? This is the continuous cash with the store. What is the relationship between flow effects and sales to nearby stores?”