Victoria’s Secret just axed a business with $1 billion potential

Victoria's Secret

Victoria’s Secret will soon no longer sell swimwear.

The lingerie giant will stop selling swimwear after 2016, according to a note from Citigroup as well as two people familiar with the company, reports BuzzFeed News. Citigroup reportedly indicated that the brand’s swimwear space would be “better used for VS Sport,” Victoria’s Secret’s activewear line.

Just last May, analysts had said the swimwear category had the potential to grow into a $1 billion business. Swimwear is a $500 million part of Victoria’s Secret business, parent company L Brands reported early last year, accounting for 6.5% of sales.

However, BuzzFeed notes that last August the company reported lower sales for swimwear, after designing overly-complex swimsuits. The brand sold a variety of mix-and-match swimsuit tops and bottoms, utilising designs intended to enhance curves.

Victoria's Secret

The news comes after Victoria’s Secret parent company L Brands announced earlier this month that Victoria’s Secret will be cutting “certain merchandise categories,” plus approximately 200 employees, as part of a wider restructuring plan.

With the restructuring program, Victoria’s Secret will be split in three divisions: Victoria’s Secret Lingerie, Victoria’s Secret Beauty, and PINK.

“We are making these changes to accelerate our growth and to strengthen the business for the long term by narrowing our focus and simplifying our operating model,” CEO Les Wexner said in a statement on the topic. “I am certain that these changes are necessary for our industry-leading brands to reach their significant potential.”

Victoria's Secret

Victoria’s Secret told Business Insider that it could provide no further information at this point beyond the announcement of the restructuring, and could not speak to the future of the swimwear program specifically.

The apparent end of swimwear at Victoria’s Secret comes at a tumultuous time for Victoria’s Secret. The company’s longtime CEO, Sharen Jester, abruptly departed the brand in February.

Separately, some customers have called Victoria’s Secret’s strategies into question, as the success of plus-sized models and anti-airbrushing campaigns illustrate the rise of beauty standards that diverge from Victoria’s Secret traditional marketing campaigns.

However, the lingerie brand is still the most successful in the world, holding 61.8% of the lingerie market, according to the IBIS World. Victoria’s Secret comparable sales for March were up 2%.

NOW WATCH: Victoria’s Secret models are obsessed with this food delivery service