Victoria’s Secret, the battered lingerie brand, has a new CEO. Parent L Brands, Inc. (NYSE: LB) reported John Mehas has been named Victoria’s Secret chief
Mehas comes from successful clothing and accessories company Tory Burch, where he was president. Prior to that, he worked at Club Monaco, a part of Polo Ralph Lauren.
Victoria’s Secret needs a quick turnaround. Once the standard-bearer of the American lingerie business, its same-store sales fell 2% in the quarter which ended October 28. That was on top of a 4% drop in the same period a year ago. Revenue for the recent quarter was $ 1,528.8 million compared with $ 1,538.9 million in the year-ago period.
The trouble at Victoria’s Secret has contributed to a 42% drop in the share price of parent L Brands so far this year. The company also cut its annual dividend from $2.40 to $1.20. The savings of $325 million will be used to pay down debt
Victoria’s Secret has a number of emerging and growing brands which have challenged its position as the most popular lingerie brand. These include Cosabella, Else, Lonely, and The Great Eros. Some of these brands are more “racy” than Victoria’s Secret. Others are designed to cater to the woman who wears sizes larger than those Victoria’s Secret usually promotes
The annual Victoria’s Secret Fashion Show is a showcase of thin models who showed off the brand’s sexiest outfits. It is seen by millions of people around the world via TV and over the internet. Recently, it has been criticized for showing models who have figures with proportions rarely similar to those of Victoria’s Secret customers.
One of the ways that the company has tried to keep customers and bring in new ones is sharp discounts. Some popular items carry 40% discounts as the brand enters the critical holiday season.
When he announced the appointment of Mehas, L Brands Chairman and Chief Executive Officer Leslie H. Wexner said: “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.”
It is rare that an iconic brand faces an examination of “everything”