American lingerie brand Victoria’s Secret has recorded US $1.6 billion in its second quarter sales while posting a 6% decrease in same-store driven by decline in traffic and lower amount of sales.
The international lingerie brand also saw its second quarter operating income decline by US $97.7 million to US $16.6 million. Their overall apparel sales were flat if we compared it to the last year, despite a growth in sports bra sales. Also, recently VS re-balanced its pricing model to increase merchandise offerings while making the brand more accessible to its core customers. As a result of this, its PINK sub brand saw a decline in the average unit retails although its sales increased.
The slow momentum also tickled down to Victoria’s Secret’s beauty segment as the fragrance category sales were flat for the quarter due to an offset in July launch. A miss in its mist business also cost a dip in Victoria’s Secret’s fashion and lip business. The merchandise margin rate was also down, driven by semi-annual sale clearance.
According to the reports, L Brands (Victoria’s Secret Parent Company) will priorities on improving performance in the second half of the year. John Mehas and Amy Hauk, CEOs at Victoria’s Secret Lingerie and Pink respectively, have aligned and updated merchandise with current fashion trends. Reports also said that the customers response to the new Fall merchandise in Victoria’s Secret lingerie has been favorable.
Victoria’s Secret will be focusing on more targeted, strategic promotions for long term health go the brand. As a result, the brand anticipants a negative impact to traffic compared to last year.
The lingerie brand faced many issues in past few months. Most recently for losing its chief marketing officer Edward Razek. He has been with the company for more than 27 years and was called out in November 2018 for his statement on putting transgender model on the show.