Victoria’s Secret Sales Disappoint

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Concerns that Victoria’s Secret, a division of L Brands Inc. (NYSE: LB), has lost some of its steaminess continued as its sales for the year were announced as part of disclosure of the company’s most recent numbers. Despite the brand’s nearly universal fame, it has been unable to build a new consumer base.

L Brands announced:

… net sales of $2.516 billion for the five weeks ended Dec. 30, 2017, an increase of 3 percent, compared to net sales of $2.438 billion for the five weeks ended Dec. 31, 2016. Comparable sales increased 1 percent for the five weeks ended Dec. 30, 2017.

The company reported net sales of $11.592 billion for the 48 weeks ended Dec. 30, 2017, compared to net sales of $11.769 billion for the 48 weeks ended Dec. 31, 2016. Comparable sales decreased 4 percent for the 48 weeks ended Dec. 30, 2017. For the 48 weeks ended Dec. 30, 2017, the exit of the swim and apparel categories had a negative impact of about 3 percentage points and 5 percentage points to total company and Victoria’s Secret comparable sales, respectively.

The holiday is the most critical sales period for virtually every retailer, which makes the Victoria’s Secret numbers all the more depressing.

Victoria’s Secret has very few direct competitors. However, several large retailers are in the lingerie business. Each likely is chipping at Victoria’s Secret revenue. American Eagle Outfitters competes with its Aerie merchandise. The Gap has its GapBody line, which includes the Breathe Shop Intimates Collection. Hanes has its Bali brand of lingerie.

Victoria’s Secret likely remains the leader in lingerie sales. Its “Fashion Show” is clearly the industry’s premier event. However, without any question, it is slipping.