It looks like Victoria's Secret is about to get the top-to-bottom overhaul it has long needed. Following a stretch of declining sales and increasing criticism around the lack of inclusivity in its marketing, culminating in a controversial interview with CMO Ed Razek on Vogue.com that faced immediate and scathing backlash, the lingerie brand is finally taking steps to turn things around.
A few days after that fateful interview, in which Razek defended the lack of trans and plus-size models in Victoria's Secret's fashion shows, the company announced the resignation of CEO Jan Singer. And on Monday, it announced her replacement: John Mehas, current president of Tory Burch.
"John is an outstanding retail merchant and we could not be more excited for him to lead Victoria’s Secret Lingerie to a new phase of success," said L Brands CEO Leslie H. Wexner in a statement accompanying its third-quarter earnings report. "Our number one priority is improving performance at Victoria's Secret Lingerie and PINK. In doing so, our new leaders are coming in with a fresh perspective and looking at everything … our marketing, brand positioning, internal talent, real estate portfolio and cost structure. Most importantly, we are focused on our merchandise assortment – it all starts with the customer saying 'I'll take it.' I am confident that, under John's leadership, Victoria's Secret Lingerie, the world's leading lingerie brand, will continue to be a powerhouse and will deliver products and experiences that resonate with women around the globe."
In the third quarter of the year, the brand's comparable store sales declined 6 percent with profit margins "down significantly." Both lingerie and Pink brand were to blame for the decline. During a conference call with investors Tuesday morning, L Brands CFO Stuart Burgdoerfer reiterated that "everything is on the table" when it comes to evaluating the Victoria's Secret business, something Mehas will be tasked with.
Though, the company has already made one major decision without him — one that reverses one of the biggest decisions it's made in recent years: It's going to relaunch swimwear. People were shocked when it announced plans to exit the swim category in 2016, reportedly to focus on lingerie and Pink, where it saw more opportunity. The company's sales took a major hit as a result, and they haven't really recovered, clearly.
Swimwear will be back by spring 2019, said Burgdoerfer, and the brand may be "entering some other exited categories" as well. Around the same time, the brand got rid of its popular catalog, which sold a wide range of women's apparel and accessories. He added that there are plans to also begin selling eyewear and Ugg products through licensing agreements.
Victoria's Secret's declining sales are also the result of increasing competition from other affordable, direct-to-consumer brands — not to mention size-inclusive labels like Savage X Fenty, Aerie and ThirdLove — an issue it could also face with swimwear, a category that many new brands have entered since Victoria's Secret exited that market.
Suffice it to say, it's going to be a long road for VS as it attempts to return to growth, relevance and public favor.