Victoria’s Secret & Co. has become a study of transformation in the wake of chaos. 

After a torrent of criticism for presenting too narrow a view of beauty, an aborted sale and finally a spin-off during the pandemic, the company and its chief executive officer, Martin Waters, have been working steadily at change. 

In its first full year as a stand-alone company, Victoria’s Secret reached out in new ways by:

  • Launching Undefinable, a global brand campaign focusing on individuality and diversity.
  • Consolidating the Victoria’s Secret and Pink brands under one umbrella. 
  • Hiring a chief customer officer, a chief supply chain officer and a chief growth officer. 
  • Bringing Victoria’s Secret and Pink to Amazon. 
  • Acquiring Adore Me and investing in Frankies Bikinis. 
  • Entering India and Israel and more. 

It’s a high-wire act — in skimpy underwear — and it’s still very much underway, as consumers adjust to the company’s new approach and investors try to wrap their calculators around all the moving parts.   

On a conference call with analysts after releasing 2022 results, Waters both pointed to the next steps in the company’s journey and expressed satisfaction with the work done so far. 

“I’m delighted by the connections we’re making and deepening with our customers as we aspire to become a Victoria’s Secret where everyone feels seen, respected and valued,” the CEO said. 

“We believe we are two years into a five-year journey in the turnaround of our business,” he said. “And we have a clear road map to be the world’s leading fashion retailer of intimate apparel.”

Last year the firm’s net profits decreased 46 percent to $348.1 million as sales slipped 6.4 percent to $6.3 billion. But Waters noted that both Victoria’s Secret and Pink’s inventory levels were clean — down double digits on an adjusted basis at the end of the year — and that the business model has been “stabilized” and able to “weather difficult times.” 

“As we begin the new year, we’re mindful that the domestic economic environment continues to be challenging and continues to put pressure on our customers,” he said. 

Specifically, Pink has had a tough go of it in apparel lately, but Waters said that is being addressed. 

“It’s time for some urgent reinvention,” the CEO said. “I’ve seen that reinvention, and I’m super excited about it. Customers will start to see it toward the end of Q2. It’s a new design direction. It’s a much more fresh approach, more and better outfit starts, more modern raw materials and fabrications.”

Pink is approaching a $3 billion business, with half of that in intimates and the other half divided between apparel and sleepwear, he said.

“Pink apparel has been remarkably successful for us over a long period of time,” he said. “We’ve enjoyed this part of the business over the years. And often when businesses are really, really good and very healthy, we forget to renew them and we lose focus on the product life cycle. Maybe we hang on to them a little longer than we probably should.”

Reinvention, it seems, is the byword, at Pink and the namesake brand. 

But it all takes time. 

Neil Saunders, managing director of GlobalData, said the pace of decline moderated in the fourth quarter, but the “general trajectory remains the same.”

“Victoria’s Secret is a brand in decline that has not, as of yet, managed to reposition itself for growth,” Saunders said, noting that the business is adjusting just as competitors, like Aerie and Gilly Hicks, rise.  

Saunders said the brand “remains broadly out of kilter with general demand and continues to deter some shoppers.…Changing a brand with a deeply embedded position is a journey of a thousand steps, and Victoria’s Secret is still at the start of its trek. That said, we believe that the new team is committed to making the changes and has already taken actions that will pay dividends down the road.”

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