The holidays didn’t bring the gift of increased sales to Victoria’s Secret.
Instead, the shopping season was marked by reduced revenues both in stores and online for the lingerie brand.
Victoria’s Secret’s online business fell 6 percent in December. That’s on top of a 1 percent drop in sales during the same period last year. Meanwhile, in-store sales dropped 8 percent, on top of a 6 percent decline in December 2017.
Amie Preston, chief investor relations officer for L Brands, the parent company to Victoria’s Secret, which also owns Pink and Bath & Body Works, said in a statement that the slump was driven by a decline in lingerie and the Pink business.
In fact, almost all of December’s gains were from its lucrative Bath & Body Works. L Brands December 2018 sales report, which ran through Jan. 5, reported sales of $2.47 billion, down from $2.5 billion in December 2017.
In a statement, the company said it expects to update its fourth-quarter earnings guidance from $1.90 a share to $2.10 a share, largely based on its recent sale of smaller intimates brand La Senza for $80 million. Last fall, in an effort to drum up more cash, L Brands also announced it was closing its money-draining Henri Bendel business by January 2019.
Still, L Brands’ stock was down nearly 10 percent Thursday morning and company shares have fallen more than 43 percent in the last year.
Victoria’s Secret, with its waif-like models and bejeweled underwear offerings, has been struggling in recent years to maintain market share as consumer preferences shift to brands with basic fashions that promote inclusivity. The company has employed a number of methods to try to revive the brand, including announcing that it would reintroduce swimwear this spring. In addition, John Mehas, formerly of Tory Burch, was tapped to run the company after former Victoria’s Secret ceo Jan Singer unexpectedly quit in November.
But even the annual Victoria’s Secret fashion show, once one of the most anticipated fashion spectacles of the year, couldn’t help resuscitate the brand’s dying image. Television viewership for New York’s November show, which aired Dec. 2, was down.
“Victoria’s Secret’s big holiday miss reaffirms our view that significant progress towards a Victoria’s Secret turnaround in [the first half of] 2019 seems unlikely,” Michael Binetti, an analyst at Credit Suisse, wrote in a recent note.