Victoria's Secret: Rethinking Pink, Inclusive Marketing And The Fashion Show Comeback

Image above: Naomi Osaka 

Victoria's Secret & Co. again proves to observers that its comeback is for real, with fourth-quarter results that bested top- and bottom-line expectations. Executives are bullish about the impact of new marketing campaigns and the potential of the ongoing expansion of its store-of-the-future format.

There are still problems as the retailer fends off dozens of smaller brands with strong appeal for younger women. At Pink, the brand aimed at teens, sales of sleep and apparel–roughly half of the $3 billion business–underperformed.

"We've already begun to urgently reimagine the Pink apparel strategy, assortment and positioning," said Martin Waters, chief executive officer of VS&Co, in a call webcast for investors.

Sales dropped 7% to $2.02 billion, compared to $2.18 billion in the prior year. On a comparable sales basis, they declined by 6%.



Net fell to $173 million, versus net income of $246 million in the fourth quarter of 2021.

The company anticipates 2023 sales to increase in the mid-single digit range as it brings sales from the recently acquired Adore Me into the mix. It expects a sales decline in the mid-single digit for the first quarter.

Waters called out several highlights for VS&Co., which is concluding its first full year as an independent public company. Among them: The debut of Love Cloud, "both a proof point in our best of bras story and our most inclusive marketing campaign ever," and the first-ever bilingual campaign for Victoria's Secret Beauty, starring model Camilla Cabello.

It also introduced its first fine fragrance in five years and Undefinable, a global brand campaign "that celebrates individuality and diversity."

Waters said the company has hung on to its No. 1 position in the intimates market, with a 20% share of all bras and panties.

And last month, it began piloting a revamped loyalty program and launched a new collection with tennis star Naomi Osaka.

While the company says it intends to keep its marketing spending at about the same level -- between 4% and 5% of sales -- marketing investments this year will include more at the top of the funnel and support for the new version of the Victoria's Secret fashion show.

In October, the Reynoldsburg, Ohio-based company announced it would bring the show back after canceling it in 2018.

The fashion show's return is "reclaiming one of our best marketing and entertainment properties to date," a spokesperson tells Marketing Daily via email. The company plans on "turning it on its head to reflect who we are today. We're excited to share more later this year. "

Many remain skeptical that the company can ever recapture its former glory.

“We believe that the new team is committed to making the changes and has already taken actions that will pay dividends down the road,” writes Neil Saunders, managing director of GlobalData, in his comment.

But he says the brand “remains broadly out of kilter… While we recognize and applaud management’s commitment and efforts to make Victoria’s Secret more inclusive and palatable, this still hasn’t filtered through to customer perception.”

And while it continues it reinvention journey, competitors’ stars are rising, including Aerie and Gilly Hicks.

“While the company has a chance at capturing some of this spending with its new Happy Nation digital brand and via the acquisition of Adore Me, neither of these offerings has the firepower to take on a company like Aerie," according to Saunders.

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