L Brands has had a rough year, but its new leader at Victoria’s Secret looks to be making headway with bringing the brand back to a focus on its central offerings of constructed bras and in-store service.
Jan Singer, who came on to lead Victoria’s Secret early last year, said during a call with Wall Street analysts that her plan to return to a focus on bras, constructed bras in particular, is starting to gain momentum.
“The strength of the core is constructed bras with benefits, balanced with fashion and emotional content, and that’s working for us,” Singer said. “We will continue to build bras with benefits balanced with fashion. And when we do that, we do get paid for that work.” She added that the recent launch of the Illusion bra exceeded internal expectations “and continues to sustain at a higher rate than our previously constructed bra launches.”
“It’s working,” Singer said. “And we’ll continue to stay on that offering.”
As for increasing competition from new online-only lingerie brands, like True & Co., which was acquired this year by PVH Corp., and Adore Me, Singer said Victoria’s Secret still has a lot of power in its massive store fleet.
“We all love competition. It makes us stronger,” Singer said. “I think that’s always great to see the landscape and we’re well aware of it. I track it pretty closely on intimates and apparel as it relates to our customer. What I love about our business is with a thousand stores and the strong digital flagship store, we are able to offer choices for [the customer]. Being fitted for a bra is a unique experience…there’s nothing that can replace that engagement with a customer.”
She added that Victoria’s Secret saw double-digit growth in its digital business during the quarter and L Brands founder and chief executive officer Leslie H. Wexner said during a recent investor day there are “some really exciting things” coming on that front.
Despite some positive trajectory at Victoria’s Secret, along with L Brands seeing a 1 percent increase in consolidated sales to $2.61 billion, shares of the company fell 1 percent in early afternoon trading to $48.72.
Wall Street is likely concerned about a 29 percent drop in net income for the quarter to $86 million and a decrease in comparable-store sales of 1 percent. Victoria’s Secret sales alone fell 3.2 percent during the quarter to $1.24 billion, after seeing consistent declines over the last year.
There was little mention of traffic at the lingerie retailer during the call outside of Singer making note of a general improvement over the third quarter.
The ceo also highlighted Victoria’s Secret’s growth categories of sleepwear, which is still benefiting from an ongoing trend of silk pajamas and lingerie as streetwear, and its athletic sportswear category. Singer said both areas are up “double digits” and noted the successful launch of the Angel Max sports bra.
“[That] launch was strong and the first single day did more [sales] than our best sport bra launch did in one full week,” Singer said. “We continue to see that build. It’s attaching to tights, multiple tights, and tops.”
Nevertheless, it seems that Victoria’s Secret is hitting some bumps on the international front. Martin Waters, ceo of international said while sales abroad increased by about 11 percent, it was mainly due to the opening of new stores.
“The base business continued to see negative comps similar to those experienced in North America,” Waters said. “The U.K. business continues to be tough and we’re very focused on getting that business back on track.”
He added that L Brands is still focused on expanding in China with its “enormous long-term potential.” The upcoming Victoria’s Secret fashion show will be held for the first time in Shanghai this year.
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