VICTORIA’S SECRET TAKES A BRAVE STEP

Byline: Laura Klepacki

NEW YORK — With a series of sly and seamless moves worthy of a seductress, Robin Burns has changed the character of Victoria’s Secret Beauty before anyone quite knew what was happening.
From a shop filled with $25 fragrances and fruit-scented toiletries priced at three for $21, Burns, in her two years as president and chief executive officer of Intimate Beauty Corp., has deftly traded up the merchandise with scents and lotions priced $39 and higher. Bold pink and gold shopping bags have been supplanted by more sophisticated pale pink-on-pink designs. And in-store curved display tables and soft lighting are replacing standard shelving units.
In little more than a year, Burns has launched a trilogy of prestige-priced scents under the lingerie company’s Dream Angels banner that have exceeded predictions and are expected to ring up $200,000 in sales this year.
The plan is to build “a portfolio of fragrance” over a period of time, said Burns, a former top Estee Lauder executive, speaking from the company’s 43rd-floor conference room, complete with wraparound views of Central Park and the surrounding city.
And now, Burns and her power team — she poached talent from every corner of the industry — are girding to prove their staying power. For the first time, it will unveil a prestige scent not directly linked to a successful Victoria’s Secret lingerie franchise. The fragrance, called Pink, will make its debut in April.
Pink, according to Burns, “is sexy and sophisticated, ultrafeminine and playful, but it is distinctive from Angels.”
Pink, a fresh, floral fragrance, will make its debut in two forms — Parfum Luxe, a richer, fuller scent with 26 percent concentration, and an eau de parfum spray with 20 percent concentration. Luxe is available only in a 1-oz. size for $48, while the eau de parfum comes in sizes of 0.5 ounces for $25, 1.7 ounces for $39 and 2.5 ounces for $45. Ancillary products will follow in July. Victoria’s Secret executives declined to comment on numbers, but industry sources believe the collection could produce sales of $48 million by yearend.
Created by Annie Buzantian, master perfumer at Firmenich, Pink has top notes of artemesia, bergamot, leafy greens, mandarin, violet leaves and juniper berry; middle notes of lily of the valley, freesia, peony and neroli flower; and dry-down of musk, vetiver, sandalwood and sheer vanilla.
Burns paid close attention to the details. The clear glass bottles, designed by Marc Gobe and produced by Pochet, have a hint of pink at the bottom and at the top of the cap lending a subtle pink cast. Even the bottle’s nozzle was crafted for a more delicate touch. The outer packaging is white with the letters P-I-N-K in pink each printed on a side.
Except for the Luxe version, which comes in a short, round bottle, Pink’s bottles are tall and slender. Lined up together, their varying heights create a skyline effect, which Burns intends to use to a merchandising advantage.
“The bottles and the color was all about a ‘touch of pink,”‘ said Burns. “We wanted it to be elegant and subtle.”
To promote Pink, Victoria’s Secret will use all its weapons — the 26 million circulation catalog, its Web site and its powerful storefront windows, viewed by millions of strolling mall shoppers.
Burns said they have already gained insight from the Dream Angels introductions. “We learned we can sell higher price points, and when you own your own retail venue, you don’t have a launch like everybody else.” By that, Burns means Victoria’s Secret can modify and tailor plans at any point.
Additionally, she said: “We know the power of our store windows and the power of testing a fragrance at the front of your store.”
And with Pink, for the first time, Victoria’s Secret will incorporate print advertising into its promotional mix, tapping supermodel Gisele for the ad campaign. Burns noted that as “we get more new products to offer, you get a reason to start advertising externally.”
The challenge with Pink, was to create a fragrance, packaging and advertising program that would make people smile, said Marcia Mossack, senior vice president, ceo for Victoria’s Secret Beauty. “I think we achieved that.”
While Pink is not linked to a particular Victoria’s Secret lingerie brand, there will always be a lingerie presence in the ads, noted Mossack, “and we will always have a touch of pink.”
Burns said being manufacturer and retailer provides numerous advantages. Members of her team including Sherry Baker, senior vice president and chief marketing officer, formerly of Sephora, and Neal Goldberg, vice president of stores, who joined from Macy’s East, exhibit emotions akin to giddiness over their new-found merchandising freedom.
“In everything we do, we have an amazing competitive advantage,” declared Baker. For instance, “[Pink] will be in millions of catalogs with scented pieces and sampled to registered shoppers who receive ongoing information on our introductions.”
Burns isn’t alone in her attempts to move consumers to higher spending. Industry observers say consumers are showing willingness to spend if the product value is there.
Over the past two years, with the launch of Physique hair care and relaunch of VS Vidal Sassoon, Procter & Gamble has worked to trade up consumers from its commodity-priced shampoos to salon-style items. It has also surprised drugstore retailers with the success of Total Effects, an antiage moisturizer priced at $20 a jar.
Douglas Christopher, an analyst with Crowell, Weedon, said the changes made by Victoria’s Secret are right for their format. Regarding the store upgrade, “I think a facelift is always a positive thing to do.” The chain unveiled a new store prototype last fall and will eventually convert all existing stores as well as roll out new units. Currently there are 480 beauty stores, of which 40 possess the new format. Plans are to add 40 to 50 stores this year, growing the chain to 800 over the next five years.
“What they are coming out with — the new bottle design and the scent — is more classic and goes hand in hand with the new store design, which almost looks like a jewelry store,” remarked Christopher.
While trying to raise prices is always risky, he added, “the price points they are going for is right — $25 to $48 — and in-line with department store brands like CKOne. It’s not like they are going to a $100 bottle.”
Christopher thinks the repositioning can help transition Victoria’s Secret in consumers’ minds from a special-occasion retailer, for Valentine’s Day and Christmas gifts, to a store to shop on a regular basis.
“I don’t think any specialty store has done it before,” commented industry consultant Allan Mottus regarding the upgrade in Victoria’s Secret Beauty. “It is a difficult thing to do. They were selling toiletries for three for $21 — and they were so unbelievably successful. To go from that to a larger prestige business is a calculated risk.”
Yet, Mottus believes there’s good reason to think the conversion can work in this case. “Victoria’s Secret apparel has really been upgraded in terms of fashion and quality of fabric. [Victoria’s Secret Beauty] obviously sees something within the dynamics of the brand that they can move in that direction.”
Furthermore said Mottus: “There is a huge void in department stores and Intimate Brands [Victoria’s Secret’s parent] has made a living taking businesses away from department stores. Victoria’s Secret is creating a lifestyle brand that has its own dynamic.”
In addition to fragrance, its core business, Victoria’s Secret Beauty markets a scented detergent line called Laundry and a color cosmetics collection. Popular original fragrances like Victoria are still available along with a reduced selection from its Garden bath and body brand.
Burns, a perfectionist, said another plus in running your own stores is the ability to maintain displays properly. “We give a visual planogram to our stores and it is executed flawlessly.”
She also runs a monthly meeting, calling in managers from its top 140 stores to discuss business. Highest performers are rewarded with prizes that could include a share of company stock, cash or gifts. However, those who have fallen behind are red-flagged. They are forced to sit in the back of the room and wear different color name badges than their more successful counterparts.
While consumers can expect Victoria’s Secret windows to be awash in Pink this spring, Victoria’s Secret marketers say Dream Angels will not drop from view. To keep interest high, it is being “overemphasized” in the early part of the year.

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