Victoria’s Secret outlines post-separation plans for stores and digital development
Ahead of Victoria’s Secret’s spin-off as a separate business, its Columbus, Ohio-based parent company, L Brands, held an investor day on Monday to outline plans for the future of the lingerie brand, including category and international expansion, new store concepts and digital development.
The Victoria’s Secret business, which also includes the Pink lifestyle label, is expected to split from L Brands’ other main banner, Bath & Body Works, in August, becoming a separate company called Victoria’s Secret & Co. In the run-up to the separation, the lingerie retailer has been busy reworking its image and assortment, as part of an overall strategy of realigning its business with the changing values of the intimates industry.
These efforts have already seen the relaunch of the Victoria’s Secret swim line earlier this year, as well as the exploration of categories including nursing and maternity bras. These moves reflect the brand's attempts to rebuild customer loyalty through an assortment that shifts away from its previous, super sexy image and attends to the needs of contemporary lingerie consumers, who are increasingly interested in comfort and inclusivity.
Looking forward, L Brands said that one of the brand’s key priorities will continue to be “evolv[ing] merchandise assortment and marketing” in order to “inspire women around the world with products and experiences that uplift and champion them.”
Victoria’s Secret, which currently boasts 520 retail locations in more than 70 countries around the world, will also be focusing on the evolution of its international business. As well as developing more country-specific web platforms that are not only accessible in different languages, but are also tailored to local preferences and tastes, the retailer will pursue further regional expansion and seek to increase its international store count.
According to Victoria’s Secret, this should be facilitated, to some extent, by new store designs, lower costs and flexible store formats. Indeed, the company’s go-forward physical retail strategy includes both investment in and rationalization of its existing fleet, as well as the roll-out of the retailer’s new “store of the future” concept, set to start testing in fall of this year.
Both the changes to existing locations and the new store concept will lean into Victoria’s Secret’s omni-channel strategy, with the expansion of services such as BOPIS and ship-from-store throughout the company’s physical fleet. The “store of the future” will also feature enhanced customer service, refined staffing models, integrated in-store online orders and returns, and a dual-brand store layout, all with the aim of elevating the customer experience and significantly lowering capex. The company further revealed that these new stores will experiment with off-mall locations.
In order to complement this brick-and-mortar strategy and create a seamless omni-channel experience, Victoria’s Secret is also planning to develop its digital capabilities. This will involve adopting a personalized, customer-centric approach and constantly improving the digital shopping experience in the hopes of driving increased conversion and average order size online.
Through these initiatives, the company hopes to achieve digital penetration of 50% within the next three to five years. In the same period of time, the retailer is aiming to achieve total sales growth in the mid-single digits, and an increase in operating income in the high-single digits.
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