Victoria’s Secret was once the one-stop shop for sexiness. Then it decided to go woke, and has been struggling with sales. Things appear to have gone yet worse for the brand, as in pre-market trading on Thursday, March 7, the company’s stock crashed hard, sinking falling off a cliff and declining by over 26% in pre-market trading. Here’s that breath-taking chart (the light grey line is the pre-market trading):
The stock market selloff appears to have been precipitated by a full-year sales forecast that was below expectations, with the brand telling investors that it would stay “conservative in the near term” after demand fell in North America. According to the company, its sales forecast is about $200 million under Wall Street’s previous forecast, with Wall Street having estimated about $6.19 billion in sales and Victoria’s Secret forecasting just $6 billion.
Bloomberg, reporting on the brand’s struggles, noted that the selloff followed Victoria’s Secret sales fell by about 6% for the quarter ended on February 3, with that news particularly bad given that sales are typically bolstered by the Christmas shopping season. Though its international sales grew substantially, by about 24%, that segment only makes up about 10% of sales and so is far less important than declining North American sales.
The decline in sales follows Victoria’s Secret’s long drift toward wokeness. That drift included, among other things, temporarily getting rid of its famous “Angels” and bringing on far-left soccer player Megan Rapinoe as a model. CNN, commenting on how that went in an editorial, noted, “favorable reviews from online critics never translated into sales: the brand is projecting revenue of $6.2 billion this fiscal year, down about 5% from the previous year and well below the $7.5 billion from 2020.”
Altogether, that drift toward prioritizing virtue signaling over profits was summed up when Victoria’s Secret and Pink brand president Greg Unis told investors, “Sexiness can be inclusive” and “Sexiness can celebrate the diverse experiences of our customers and that’s what we’re focused on.”
And it didn’t work out. Victoria’s Secret CEO Martin Waters said, “So in terms of igniting growth, we feel really good about where we are. So on the first two of the three pillars, really, really good work. The reality is we all know the performance of the company and so there must be something that’s not going to plan. It can’t all be at green status.”
He continued, “And the harsh reality is that the most important aspect of the work that we had to do in 2023, which was strengthening the core of the company, by which I mean our sales for Victoria’s Secret and PINK in North America, are not where we need them to be. And despite everybody’s best endeavors in this room and some really, really good initiatives, particularly around the launch of loyalty, which as I said earlier, has got to 18 million followers already around some of the good launches that we’ve had, the Icon Bra was spectacular, Featherweight Max, really, really good. We’ve had some great fragrance launches like Bare Rose, some really good initiatives within the business, but in the end, in the end, not enough to carry the day.“
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