While big cuts in retail — including store closures and layoffs — have become something of a recurring story in 2016 so far, there is something a bit odd about the Victoria’s Secret edition of the tale.
Most of the brands making cuts to the bone have had a run of some pretty rough sledding of late. Victoria’s Secret, on the other hand, just had a great year.
Which is why Chairman and CEO Leslie Wexner thinks the time is now for narrowing L Brands’ (Victoria’s Secret’s parent firm) focus and simplifying its business model for better streamlined future growth.
That streamlining will include eliminating the jobs of approximately 200 people at its Columbus, Ohio, and New York offices, eliminating certain merchandise categories entirely and moving its direct catalog business into a fully integrated part of its digital sales efforts.
The changes follow the departure of longtime Victoria’s Secret CEO Sharen Jester Turney. Turney had been CEO for the last decade. Under the newly announced organizational structure, the heads of the Victoria’s Secret Lingerie, PINK and Victoria’s Secret Beauty units will report to Wexner.
“Coming off a record year, now is the best time to make improvements — going from best to even better,” said Wexner. “We are making these changes to accelerate our growth and to strengthen the business for the long term by narrowing our focus and simplifying our operating model. I am certain that these changes are necessary for our industry-leading brands to reach their significant potential.”
The firm also announced a renewed focus on loyalty programs and engagement efforts, rather than catalogs and discounting.
More specifics on the reorganization are expected when L Brands has its next call with investors in May.