Victoria’s Secret sees decline in traffic and sales

Victoria’s Secret has recorded US$1.6 billion in its second quarter sales, while posting a 6% decrease in same-store sales driven by decline in traffic and lower amount of sales for the items sold. This comes on the back of a flat selling, general and administrative expenses, attributed to a decline in marketing expense at Victoria’s Secret while balanced by the absence of higher-rate La Senza and Henri Bendel businesses.The international lingerie brand also saw its second quarter operating income decline by US$97.7 million to US$16.6 million. Its overall intimate apparel sales were flat compared to last year, despite a growth in sports bra sales. Recently, Victoria’s Secret rebalanced its pricing model to increase merchandise offerings while making the brand “more accessible” to its core customers. As a result of this rebalancing, its PINK sub-brand saw a decline in the average unit retails although sales increased.The slow momentum also trickled down to Victoria’s Secret’s beauty segment as the fragrance category sales were flat for the quarter due to an offset in July launch. A miss in its mist business also cost a dip in Victoria’s Secret’s fashion and lip business. The merchandise margin rate was also down, driven by semi-annual sale clearance.According to the earnings report, L Brands will prioritise on improving performance at Victoria’s Secret in the second half of the year. John Mehas and Amy Hauk, CEOs at Victoria’s Secret Lingerie and PINK respectively, have aligned and updated merchandise with current fashion trends. The report also said that customer response to the new Fall merchandise in Victoria’s Secret Lingerie has been favourable.Moving forward, Victoria’s Secret will be focusing on more targeted, strategic promotions for long-term health of the brand. As a result, the brand anticipates a negative impact to traffic compared to last year but looks to remain flexible and adjust when necessary to drive traffic and clear through inventory.The lingerie brand has hit the headlines in the past few months, most recently for losing its chief marketing officer, Edward Razek. He has been with the company for 27 years and was called out in November 2o18 for his reluctance to put larger and transgender models on the show. In an interview with Vogue then, Razek said the show did not have transgendered models “because the show is a fantasy” and “a 42-minute entertainment special”. However, he apologised for his comments and said that the brand would cast a transgender model and had many come to castings.Not long after, Victoria’s Secret reportedly said it will stop airing its annual fashion show on network television after almost two decades. In a company memo, L Brands chief executive Leslie Wexner said the brand needs to evolve and that Victoria’s Secret will develop a new kind of event on different platforms in the future.