- Victoria’s Secret had a rocky 2018. Sales slid, and it lost a CEO, closed stores, and came under intense scrutiny for its racy ads and runway shows, which analysts said failed to resonate in the era of #MeToo.
- Toward the end of the year, L Brands CEO and founder Les Wexner addressed analysts’ concerns in the company’s third-quarter results and said the company was “looking at everything.”
- On Friday, Barclays upgraded L Brands’ shares noting that it believes “change is afoot” at the company. This report sent the company’s share price upward.
- Here’s what’s changed at the brand in the past year.
- Visit Business Insider’s homepage for more stories.
At best, 2018 was eventful for Victoria’s Secret. At worst, it was disastrous. Sales slid, and it lost a brand CEO, closed stores, and came under intense scrutiny for its racy ads and runway shows, which analysts said failed to resonate in the era of #MeToo.
Then, in November, things got worse after a Vogue interview with Ed Razek, the marketing chief of Victoria’s Secret parent company L Brands, went viral online. Razek said in the interview that he didn’t think the company’s annual fashion show should feature “transsexuals” because the show is a “fantasy.” His comments sparked an outcry online, and Razek issued a formal apology.
When the fashion show ran on TV shortly after, ABC said that ratings dropped by approximately a third from the year before.
Then, toward the end of the year, L Brands’ CEO and founder Les Wexner addressed analysts’ concerns during the company’s quarterly results. Wexner said that everything was on the table as it looked to improve performance.
“Our new leaders are coming in with a fresh perspective and looking at everything… our marketing, brand positioning, internal talent, real estate portfolio and cost structure,” he said.
On Thursday, Barclays upgraded L Brands’ stock to overweight from underweight, meaning the stock has a better value for money.. “We believe change is afoot,” a group of Barclays analysts wrote in a note to investors, which sent the company’s share price up.
We took a look at the changes the company has made over the past year that may be giving analysts hope:
It hired a slightly curvier model
In March 2019 Victoria’s Secret announced on Instagram that Barbara Palvin would become one of its newest Angels.
The news was immediately celebrated online because while Palvin is not a plus-size model, many Instagrammers perceived her to be curvier than some of the brand’s other models.
“This model actually looks healthy..& I’m loving it!” one Instagram user wrote at the time.
“At last! A real human body,” another said.
Analysts were quick to point out how successful the post had been. Within two days it had 780,000 likes and ranked No. 1 of all of Victoria’s Secret’s 103 posts from the previous 30 days, generating 4.2 times the average number of likes.
It hired its first transgender model
Victoria’s Secret hired its first openly transgender model, 22-year-old Valentina Sampaio in 2019, signalling that the brand is listening to some of its most critical customers.
Victoria’s Secret has not commented on the news, but it was confirmed in an email sent by Sampaio’s agent, Erio Zanon, to The New York Times.
Sampaio announced the news on Instagram, sharing a photograph of herself and tagging the Victoria’s Secret Pink brand and using the hashtags “campaign,” “vspink,” and “diversity.”
L Brands’ longtime marketing chief and the creative director of the annual fashion show steps down
Perhaps most strikingly of all, L Brands’ longtime chief marketing officer Ed Razek announced he would be resigning in 2019 after two decades at the company.
Razek was responsible for organising Victoria’s Secret’s annual fashion show since 1995 and became chief marketing officer of L Brands in the late 1990s. Aside from Wexner, he was the longest-standing employee at the company.
And in recent interviews with Business Insider, former employees said Razek was Wexner’s closest confidant, with full control over the creative vision of the brand.
These former employees said that the duo had an “unshakable” view of how the company’s image should be projected and were extremely resistant to change. Former employees added that ultimately Razek’s and Wexner’s attitude could be responsible for the brand’s current sales slump.
With Razek out of the company, investors are likely wondering whether we might see a new dawn for Victoria’s Secret.
It announced it is cancelling its 2019 runway show
In May 2019, in a leaked memo to employees, L Brands CEO Les Wexner said that Victoria’s Secret was “re-thinking” its annual fashion show.
“Going forward we don’t believe network television is the right fit. In 2019 and beyond, we’re focusing on developing exciting and dynamic content and a new kind of event – delivered to our customers on platforms that she’s glued to … and in ways that will push the boundaries of fashion in the global digital age,” he said.
Two months later, Victoria’s Secret model Shanina Shaik, who has walked in several previous Victoria’s Secret fashion shows, told The Daily Telegraph in Australia that the annual show is off.
On November 21, L Brands CFO Stuart Burgdoerfer confirmed that the 2019 show had been cancelled. “We will be communicating to customers, but nothing similar in magnitude to the fashion show,” he said.
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