Overtly sexualized ads, controversial comments from executives, and sliding sales: Here's why Victoria's Secret had a huge fall from grace in 2018
- Victoria's Secret has had a rocky year. Sales have slipped, and its provocative ads are being criticized by some as being tone-deaf in the era of #MeToo.
- In November, the company came under scrutiny after one of its parent company's executives made controversial comments about transgender and plus-size models in a recent interview with Vogue.
- Year-to-date, its same-store sales numbers at stores are down 5% - or 1% including its online sales.
It's been a rocky year for Victoria's Secret.
America's former lingerie powerhouse is increasingly being accused of losing relevance among shoppers as its oversexualized ads and racy runway shows have failed to resonate in the era of #MeToo.This came to a head in November, after a Vogue interview with Ed Razek, chief marketing officer of Victoria's Secret parent company L Brands, went viral online. Razek told the interviewer that he didn't think the company's annual fashion show should feature "transsexuals" because the show is a "fantasy."
"It's a 42-minute entertainment special. That's what it is," he said in the interview.
His comments sparked an outcry online, which later led to him issuing a formal apology.
Less than a week later, Victoria's Secret Lingerie CEO Jan Singer resigned from the company and was replaced by John Mehas, formerly president of Tory Burch. Victoria's Secret has not commented on why Singer left.
The annual fashion show's ratings also took a hit. According to ABC, the network that ran the show, 3.3 million people tuned in to watch the fashion show when it aired on December 2, down from 5 million viewers in 2017 and 6.7 million in 2016, when it previously aired on CBS.
The backdrop to these events wasn't any more positive. Victoria's Secret and its sister brand Pink have faced ongoing sales pressure over the past year and are closing stores as a result. Year-to-date, same-store sales numbers at Victoria's Secret stores are down 5% - or 1% including its online sales.Meanwhile, more body-positive brands such as American Eagle's Aerie and ThirdLove (which is becoming increasingly critical of Victoria's Secret) have gained market share.
Earlier this month, American Eagle reported a 32% increase in same-store sales at Aerie. This marked its 16th consecutive quarter of double-digit positive growth. Group CEO Jay Schottenstein described this as one of the company's best results ever during a call with investors after the earnings release.
Teen-centric brand Pink, which was one of Victoria's Secret's strongest areas, has also shown signs of struggle this year, and analysts have become increasingly concerned about its future.
"We believe Pink is on the precipice of collapse," Jefferies analyst Randal Konik wrote in a note to investors in March, commenting on the level of promotions in stores.
"Victoria's Secret brand is broken and Pink is now breaking," he later wrote in a note to clients in August.
Parents have complained that Pink was being brought down by Victoria's Secret's oversexualized ads.
"It's basically pornography," shopper Jessie Shealy wrote on Victoria's Secret's Facebook page in February, referring to the pictures on display in her local store in South Carolina.These ads don't seem to be resonating with their teen children either. A recent survey of teen spending habits conducted by Piper Jaffray showed that Victoria's Secret had fallen off of a list of US teens' favorite clothing brands for the first time in years.
Read more: Teens are abandoning Victoria's Secret
"The brand is simply not connecting and resonating with consumers in the way that it once did. Indeed, we would go so far to say that its overt sexuality, its focus on airbrushed glamour, and its dark and moody stores are completely out of step with the mood of most modern consumers," Neil Saunders, managing director of GlobalData Retail, wrote in a note to clients in November.
Now analysts are hoping that a new CEO may be able to resurrect the business in 2019.
"The departure of Jan Singer as CEO should help herald in changes," Saunders wrote. "Someone coming in will have fresh ideas about reviving the fortunes of Victoria's Secret."
However, he cautioned that "a powerful personality" will be needed "to blow away the entrenched attitudes that have prevailed for too long."