L Brands is moving forward with plans to eliminate all non-innerwear except loungewear and beach lifestyle apparel from its Victoria’s Secret Direct operation within the next 12 months.
During a presentation Wednesday at The Barclays Retail and Consumer Discretionary Conference, Amie Preston, chief investor relations officer, said that categories including dresses, sweaters, jeans and shoes, which have been deemphasized online in the past 18 to 24 months, will be eliminated entirely.
This confirms details first reported in WWD on April 10.
Last year, Victoria’s Secret Direct generated $1.52 billion in sales while its stores were responsible for $5.17 billion in revenues, accounting for 14.1 percent and 47.9 percent, respectively, of corporate revenues of $10.77 billion.
Preston explained that, of the $1.5 billion direct business, $1 billion is in “the core categories that are shared with the stores — lingerie, Pink, swim, sport — and then a little less than $500 million is merchandise that is not carried in the stores.”
The latter piece, encompassing more traditional apparel categories, “has been declining,” Preston said. “There have been margin pressures in that part of the business — apparel is a much more competitive category — and these products are not branded with Victoria’s Secret or tied as closely to the merchandise within the stores.”
She said L Brands has seen “very strong growth” in the categories shared by the direct operation and the stores, with sales advancing at a “high-single-digit” pace.
“We decided within the business several weeks ago to completely exit certain categories of that assortment,” she said. “We will continue to focus on what we would call loungewear or beach lifestyle, which is merchandise that’s more consistent with what’s carried in the stores.”
The thinning of the VS Direct assortment is expected to result in job cuts. Preston didn’t comment on the effect the move would have on corporate headcount.
She also told attendees that international e-commerce was becoming an increasingly high priority for L Brands, which has yet to launch dedicated Web sites that do business in foreign currencies or different languages. Currently, all merchandise bought online is shipping from the firm’s Columbus, Ohio, distribution facilities.
“That is definitely a big opportunity as we continue to expand internationally,” she said.