Victoria’s Secret is on a tear, having just posted its 24th consecutive month ofcomparable-store sales gains. The last time the chain posted a negative monthly comps result was December 2009, when it was down 6 percent.
The chain’s solid performance is one reason its parent, Limited Brands Inc., is on a growth trajectory.
Limited said this month that VS posted an 11 percent jump in comps in December. According to Christian Buss, analyst at Credit Suisse, “Comps were balanced across the assortment.…Victoria’s Secret Direct sales were up 6 percent, driven by Pink, active, dresses, swim and sleepwear.”
For 2011, Victoria’s Secret’s average comp-store gain was 15.7 percent, with the retailer’s best months in January, when it posted a 35 percent rise in comps, and April, when comps were up 25 percent.
In 2010, its average comps rise was 12.7 percent, with its best performing month in March, up 19 percent. Two months, January and June, saw comps grow 17 percent.
So what’s the real secret?
Stifel Nicolaus retail analyst Richard E. Jaffe noted that Victoria’s Secret was able to “drive significant traffic with limited promotions, likely benefiting margin in the quarter.” He said promotional activity for holiday 2011 was planned down to the levels of holiday 2010, and that an improved gift assortment at Pink was effective at driving sales.
According to Limited Brands’ Form 10Q filed for the third quarter on Dec. 2 with the Securities and Exchange Commission, operating income for Victoria’s Secret rose 21.1 percent to $149 million from $123 million for the comparable quarter in 2010. For fiscal year 2010, operating income for Victoria’s Secret rose 51.5 percent to $877 million from $579 million in 2009, according to a Form 10K filed with the SEC on March 18, 2011.
Overall, Victoria’s Secret hit $5.92 billion in sales in 2010.
Limited Brands won’t post fourth-quarter and 2011 full-year results until the latter part of February. In the third quarter ended Oct. 29, Victoria’s Secret’s U.S. stores posted a 13 percent same-store sales gain, a 12 percent sales increase to $942 million, and an 8 percent rise in sales for its direct channel, to $277 million, according to Sharen Turney, chief executive officer and president of Victoria’s Secret Megabrand and Intimate Apparel, during the quarter’s conference call to Wall Street.
Turney said third-quarter launches contributing to the gains included the Showstopper bra, the Pink Heartbreaker bra, the Unforgettable bra and the Gorgeous bra. Complementing its bra launches was that of its Gorgeous fragrance, which helped drive multiple sales for the bra and fragrance categories.
There doesn’t appear to be any slowdown ahead, provided the management team continues executing its game plan.
Analyst Jennifer Black, head of her namesake firm, predicted growth at Victoria’s Secret will come from its core business and increasing “adjacent categories like VSX, loungewear and swim.” She noted that currently only 10 percent of Victoria’s Secret stores in the U.S. have the full Pink assortment.
“Pink is a huge opportunity for growth for the company,” she said.
Black believes the firm has the potential for ramping up the Pink business to “$1 billion in sales — it’s currently at $500 million — with significantly more potential over the next five years. Additional categories within Victoria’s Secret include loungewear, which could reach $1 billion in sales, as well as Victoria’s Secret beauty, which could reach $2.5 billion in sales.
Breaking News: @louisvuitton's men's artistic director @mrkimjones is leaving the French fashion house after nearly 7 years. Jones joined Louis Vuitton in 2011, following a three year tenure as creative director of British luxury goods brand Alfred Dunhill. Jones is to exit Louis Vuitton after showing his fall 2018 collection for the brand in Paris on Thursday. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews