Is Victoria’s Secret’s ‘buy 2, get 1 free’ promo the beginning of the end?
Victoria’s Secret has been called out of touch with its female consumers for continuing to push wired bras instead of bralettes. It has been derided for its sexy image that some say is tone deaf in the era of the #MeToo movement. Whatever the reason(s), the chain continues to struggle and has gotten more promotional in an effort to “sales” its way out of its slump.
In a letter to clients earlier this week, Jefferies analyst Randal Konik wrote that a “buy 2 get 1 free” promotion on Body by Victoria bras and lower prices on Pink panties were “scary” signs for the retailer, according to a Business Insider report.
“Our panty price tracker for over a decade shows this is the lowest ever price point for panties across VS or Pink,” Mr. Konik wrote. “We believe it shows how desperate the company is to drive consumer traffic and also shows how soft demand for Pink has become.”
Same-store sales at Victoria’s Secret declined one percent in the second quarter, leading L Brands, the chain’s parent company, to lower its profit outlook for the year.
Shares of L Brands fell precipitously last month when Victoria’s Secret announced a decline in revenues due to unexpectedly low customer traffic for the chain’s semiannual sale. In the end, Victoria’s Secret was forced to add two additional weeks to the sales event and further reduce prices, which cut into its margins.
CNBC reports that Victoria’s Secret has continued to lose share to rivals including Adore Me, Aerie and Thirdlove, which focus on selling lower price bralettes to Millennials. As a legacy brand, Victoria’s Secret has not been able to get past an image built over decades.
“The dark store environment, the conspicuous sexuality of the offer, and the brash marketing are increasingly out of step with what modern consumers want,” Neil Saunders, managing director for GlobalData Retail and RetailWire BrainTrust panelist, told CNBC.
- L Brands Reports Second Quarter Earnings – L Brands, Inc.
- A ‘scary’ development is taking place at Victoria’s Secret – Business Insider
- L Brands falls after slashing profit forecast – CNBC
- Investors Punish L Brands After Victoria Secret’s Weakness – The Wall Street Journal
- Has Victoria’s Secret become a casualty of the #MeToo movement? – RetailWire
DISCUSSION QUESTIONS: Do you think the Victoria’s Secret business is permanently broken or can it be fixed? How would you go about repairing it if you were given the opportunity?