By
Bloomberg
Published
Oct 12, 2023
Victoria’s Secret & Co. will expand its swim, sport and apparel offerings, reverting back to a strategy that had been a key aspect of the business 10 years ago.
In recent years, Victoria’s Secret shifted away from those categories to focus on intimates. But bra and underwear sales fell as customer visits declined, the company said in a presentation to investors on Thursday.
“Historically, when we had apparel and swim, customers loved us more,” Greg Unis, president of Victoria’s Secret and Pink, said during the presentation. The company plans to “widen our category lens” to drive growth, he said.
Victoria’s Secret went from having 16% market share in the sports bra category at its peak to just 4% today, Unis said. Competitors with higher sports and apparel sales are also experiencing growth in intimates, he added.
The updated strategy comes after five years of declining sales. Victoria’s Secret has lost about $1.8 billion in sales since 2018. Revenue for its last full fiscal year fell 6.5% from the previous year, while net income was cut in half.
The shares fluctuated between gains and losses. They were up 2.3% as of 11:58 a.m. in New York.
While the company upwardly revised its third quarter guidance on Wednesday, it still expects a net loss of as much as 90 cents a share in the period. For the full year, the company sees a net sales drop in the low-single digit range compared to last year.
Sales in North America are “not where we need them to be” and “we are not proud of how the Pink brand is showing up,” Victoria’s Secret Chief Executive Officer Martin Waters told investors.
International sales, meanwhile, are growing and profitable, said Arun Bhardwaj, the head of the company’s international business. Victoria’s Secret plans to have over 900 stores outside the US by 2027, more than it has in the country, he said.
The company relaunched its notorious fashion show last month in an attempt to revitalize its image — and sales. The show was a feature-length film rather than the live catwalk from the 2000s.
“We’re back in the conversation about popular culture,” Waters said.
