Victoria’s Secret’s Resurgence
Victoria’s Secret Maps Its Comeback
Victoria’s Secret (VSCO) shares have climbed since it went public as a standalone company last week. After suffering years of declining sales as part of L Brands (LB), Victoria’s Secret is overhauling its marketing and streamlining operations in hopes of turning around the brand. Investors seem to be enthusiastic about the brand’s initiatives.
Despite the surge in its share price, Victoria’s Secret is still trading at a big discount compared to its rivals in the undergarment market like Hanesbrands (HBI) and American Eagle Outfitters (AEO). That implies there could be room for appreciation if Victoria’s Secret’s strategies pay off.
Victoria’s Secret made the decision to retire its trademark angels, replacing them with appointed brand ambassadors. The company is also naming a new board made up almost entirely of women. These moves have garnered a lot of attention for the retailer.
The company is also working to make its operations leaner in order to strengthen its balance sheets. Victoria’s Secret has been shedding underperforming stores, changing its marketing message, reducing the amount of inventory it holds, and scaling back promotions. The company also repurchased its swimwear business and is now selling maternity undergarments and shapewear. These strategies are designed to reduce operational costs and boost sales.
Victoria’s Secrets Bets Pay Off
So far, Victoria’s Secret’s initiatives seem to be paying off. In its fiscal first quarter, the company’s sales were higher than pre-pandemic levels despite the fact that the brand closed 241 stores last year. Operating margins were 15% in the quarter compared to 1% in 2019. It has also been able to maintain its number-one position in the women’s underwear market despite competition from upstarts which have been quicker to embrace inclusivity. With $350 million slated for marketing this year, it has a lot of firepower to maintain that lead and spread a more inclusive message to consumers.
Victoria’s Secret is working to regain strength after years of declining sales. It will be interesting to watch as the brand continues to build its business on its own terms.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.