The slender supermodel calendar girls are gone. The imposing, fortress-like mall stores are steadily vanishing. And the racy collection of skimpy satin and lace lingerie has undergone an extreme makeover to suit the needs of a larger and more casual mainstream.
It’s Victoria’s Secret 2.0, and essentially everything that put the world’s largest specialty retailer of women’s intimate apparel and beauty accessories on the map over the past 30 years has either been changed or scrapped altogether.
Today, seven months — and now three quarterly earnings reports — into its new life as an independent, publicly traded company, the Ohio-based operator of nearly 1,400 stores unveiled a raft of plans in the wake of its “milestone first year,” including a parade of upcoming product launches, several new brands, and a mix of promotions aimed at attracting new customers.
Read more: L Brands Announces Spin-Off Of Victoria’s Secret
“In all, 2021 was a milestone year for us, and we took action to stabilize the business and establish a platform for future growth,” the company’s commentary for analysts and investors on its Q4 earnings stated, before rattling off 7 specific inaugural achievements, including its August spin-off from L Brands, its purpose-driven rebranding and inclusion initiatives, and the commencement of a physical and digital store rebuild program aimed at becoming a true omnichannel retailer complete with curbside capabilities.
‘A Challenging Environment’
For the period that ended January 29, VS&Co said its 4th quarter and 2021 full year comp store sales rose 12% and 10% respectively, despite challenges from ongoing supply chain uncertainty, inflationary pressures, and a $75 million headwind due to the lack of federal stimulus checks this year.
As a result, the reborn retailer says its first quarter sales will be down by 4 to 8 percent, due in part to a 4% (or 34 location) reduction in physical stores.
For fiscal 2022, the company is forecasting a “challenging environment” that it expects will continue for at least the first half of the year before returning to growth in the final six months. All in, Victoria’s Secret said it expects full year ‘22 sales will be “flat to up low-single digits.”
On the flip side, VS&Co said it plans to open 15 new stores this year, all in off-mall locations and mostly in its new, open, brighter and more digitized “Store of the Future” format.
3, 2, 1 Launch
Amidst this backdrop, the retailer is planning an all-out marketing and branding assault to lessen the impact, saying it will roll out an array of new products this year in the wake of its new comfy/casual “Love Cloud” brand that it launched on Valentine’s Day last month.
“Love Cloud was the biggest bra collection launch in six years,” the company’s earnings presentation said, noting the brand’s first-of-its-kind campaign focused on everyday comfort that’s being promoted by “18 dynamic women” in keeping with its new Values proposition and emphasis on diversity, equity and inclusion.
“We are very pleased with the performance of this launch over its first two weeks,” the retailer said. “We continue to see positive response to newness and being able to sustain a lower level of promotional activity.”
Speaking of promotion, VS&Co said it plans to do numerous launches this year, including a new digital-first “Happy Nation” line aimed at pre-teen or “tween” girls, as well as a triple product sequel to its category-leading “Bombshell” fragrance coming out in the first half of the year.
Other differentiation efforts include further outreach and partnerships with plus-sized brands and models, more gender-neutral apparel and an empowerment campaign celebrating female entrepreneurs.
As much as VS&Co has outlined an active growth plan for 2022, the fact remains that the $4.8 billion retailer’s stock price has fallen about 7% since its debut in August (vs a 2.6% drop for the S&P 500). Even so, the company continues to distance itself from its past while keeping its sights set on the future.
“Our focus as leaders, and as a company, is on ensuring we are a future-facing business that increases in relevance.”
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