Victoria’s Secret is still being haunted by the specter of the apparel and swimwear businesses it decided to exit almost exactly a year ago.
The chain logged a 13 percent comparable-sales decline for March, with growth in the Pink business being offset by “challenging traffic levels.” The exit of swim and apparel cut 10 points off the comp total, while the later Easter took away 1 point.
A spokeswoman for parent company, L Brands Inc., said on a recorded call that the chain’s “merchandise margin rate was down to last year, primarily due to promotional events to drive traffic, and the impact of exiting non-core businesses.”
She said Victoria’s Secret will be focusing this month on “delivering new fashion in our bralettes and Pink Everywhere collection.”
L Brands, which also owns Bath & Body Works, said its overall March comps fell 10 percent and that April comps would be down in the low-single digit range with the apparel and swim exits taking off 6 points, while the later Easter adds 3 points.
It’s been a painful year for Victoria’s Secret, which is well regarded in retail, but has been adjusting course under the guidance of L Brands chief executive officer Leslie Wexner.
The retail legend, who only rarely speaks publicly, told investors at a meeting last year that: “Fashion retailing is one of change. When you catch the wind, the cycles last eight or 10 years and then you have to constantly say, ‘How do I change this?’”
L Brands is looking for Victoria’s Secret to start to grow sales by 7 to 10 percent in the second half of this year.
Wall Street seemed willing to trust Wexner that good things are ahead and investors pushed the stock up 11 percent morning trading after March results were released.
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