• by Sarah Mahoney  @mahoney_sarah, November 30, 2023

Despite intense efforts to recapture some former glory -- including reinventing the fashion show--– the decline of Victoria’s Secret is back in the news.

The company just posted third-quarter results, with sales falling 4% to $1.27 billion, compared to $1.32 billion in the prior year. Total comparable sales slipped by 7%.

It swung to a net loss of $71 million, compared with net income of $24 million in the year-ago period, disappointing investors.

Still, the company is encouraged by early responses to this year’s holiday merchandise assortment and a new marketing campaign starring Mariah Carey, “the voice of Christmas.”

The Reynoldsburg, Ohio-based retailer says it is progressing on sweeping transformation plans “designed to leverage our market leadership position and unlock our opportunity to convert our significant cultural influence into long-term financial growth.”

Observers are skeptical. While the company is still the largest lingerie brand in the U.S., market share and relevance continue to erode.

Some of that is due to well-publicized brand image struggles, as Victoria’s Secret tries to replace the hypersexualized imagery of the past with a more contemporary -- and inclusive -- approach.

But in the years spent trying to achieve that new image, a whole generation of women has come of age. And many in Gen Z aren’t just turned off by Victoria's Secret’s vibe. They don’t like bras in general. That bralette boom has made brands like Aerie, owned by American Eagle Outfitters, a favorite among comfort-craving Gen Z-ers.

In Piper Sandler’s latest ranking of teens’ favorite brands, Victoria’s Secret doesn’t make the list of top apparel names. (However, it ranks No. 2 in the fragrance category.)

The return of the company's fashion show, reincarnated as a documentary called the Victoria’s Secret World Tour ’23, fell flat, underwhelming viewers.

Neil Saunders, managing director of GlobalData, points out that the company’s sales are now down by 12.2% on a two-year basis.

“We believe any talk of a recovery is very premature,” he writes, as Victoria’s Secret continues to lose both shoppers and share of wallet.

“Like customers, we remain very confused as to what Victoria’s Secret wants to be,” he says. “Management jumps back and forth between trying to become a more genuine and authentic brand and going back to its roots of selling with sultry images.” The resulting muddle, he says, continues to damage sales.

The bright spots are continued innovation in bras, a new loyalty program and international sales.

And Adore Me, which Victoria’s Secret acquired last year for $400 million, continues to be a digital success story.

But Saunders argues that none of those gains are big enough to address the underlying problem: Victoria’s Secret has “failed to define the essence of the brand.”