Victoria’s Secret Is Rethinking Sexy with Profit Margins in Mind
After over a year of speculation, Victoria’s Secret will be spun off from L Brands. L Brands.
Beneath Victoria’s Secret’s plan to shed its image as a peddler of male lust is an age-old business strategy: boost how much shoppers like your brand and rising profits usually follow.
The retailer took plenty of gut punches over the past several years. There’s been ongoing criticism that its marketing objectified women. And then former chief executive officer Les Wexner’s ties to convicted sex offender Jeffrey Epstein further damaged the brand.
But despite all that, the major issue for the biggest unit of L Brands Inc., which also owns Bath & Body Works, wasn’t big declines in revenue as its customers mostly stuck with it. The bigger problem proved to be relying on a lot of discounting to sell items. That weighed on profitability as its parent company’s overall gross margin narrowed by about 8 percentage points from 2016 to 2019.
“We’re going to look at new customers,” said Martha Pease, who was named chief marketing officer at Victoria’s Secret last year as part of a management overhaul. “And that will drive the demand that new customers will have for our brand.”
The retailer’s marketing overhaul, announced this week, broadens what it defines as sexy, including highlighting plus-sized and transgender models. The angels, a group of scantily-clad supermodels, have been retired. It’s also brought on seven prominent female celebrities, including soccer star Megan Rapinoe and actress Priyanka Chopra Jonas, to help vouch for the chain and craft its revitalisation.
