l brands victoria's secret leslie wexner bralette

Victoria’s Secret — which built a multibillion-dollar empire on the push-up bra — isn’t taking the rise of the bralette lying down.

Instead, the retailer is diving in and rushing to get a piece of the business, which focuses on unconstructed styles that are meant to be seen outside the boudoir and offer more fashion pop than support.

Victoria’s Secret has been run directly by retail guru Leslie Wexner since February, when the chairman and chief executive officer of its corporate parent, L Brands Inc., stepped in to take the reins from Sharen Turney, who left the company. Since then, Victoria’s Secret has been steadily transforming, moving to exit the swim and apparel businesses and bringing in fresh management.

The Victoria’s Secret business saw second-quarter comparable-sales gains of 2 percent, while its corporate sibling Bath & Body Works drove a 5 percent gain. Overall, L Brands posted a 24.7 percent gain in second-quarter profits as net sales rose 5 percent to $2.89 billion.

Stuart Burgdoerfer, L Brands’ chief financial officer and executive vice president, was questioned repeatedly about the bralette on a conference call with Wall Street analysts Thursday and acknowledged there are some important trends in its core lingerie business.

“We’re taking significant action to participate in and frankly, lead with respect to those trends, and what I’m speaking about is, the unconstructed or bralette trend is one, and separately, the sports bra business as a second important development in the bra category,” Burgdoerfer said.

The retailer saw “very significant growth” in both trends and expects to do even better going forward, he said.

“We’ve made some significant progress and drove meaningful growth in both of those areas in the second quarter and intend to pursue those segments of the bra business very aggressively in the fall season,” Burgdoerfer said. “One of the important things about the bralette business or unconstructed bra business particularly is we do think it has a higher fashion element to it, and we think that’s a good thing for us.”

The cfo noted that braletts tend to have a lower average unit retail price than other types of bras, but said consumers tend to buy them more often given their fashion quotient.

Overall, he said the company — lauded for years as one of retailer’s savviest operators — is well-positioned to pivot.

“We’ve been a fashion specialty retailer for a long time,” he said. “Our abilities in terms of lead times and speed and read and react particularly play well into the bralette at category.”

Wall Street remains in wait-and-see mode.

Wells Fargo analyst Ike Boruchow noted that L Brands “appeared to stumble a bit to start 2016” and that the most recent results do show some signs of stability, but remained something of a skeptic.

“While it’s commendable that the business seems to be avoiding the ‘hard landing’ that many bears have been waiting for, we don’t think [L Brands] is totally out of the woods just yet,” Boruchow said. “On the negative side, the outlook on Victoria’s Secret remains a bit cloudy (margins will continue to be under pressure and comps could be negative in Q3), international remains slow.”

He said the company’s been pulling back on “brand-damaging promotional activity, and instead focusing promotions on driving trial in new and key categories, such as bralettes, sport and beauty.” But he noted the cut-back on promotions last quarter was “offset by the elevated clearance activity.”

That leaves the focus clearly on the second half as Victoria’s Secret continues to feel its way forward without swim or apparel.

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