In a rare retail move, Victoria's Secret is upending its business while the brand is already near the top of its game.
Victoria's Secret is trying to stay ahead of its impressive sales momentum by restructuring and cutting 200 jobs, the brand's parent company announced Thursday.
The lingerie brand, owned by L Brands, has been a bright spot in the ultra-competitive retail world for the past decade, with consistently positive comparable store sales and a diverse merchandise strategy that includes underwear, swim, activewear and beauty. Going forward, L Brands said Victoria's Secret will operate in three business units — lingerie, beauty and the brand's teen line PINK — in a move to focus the business on the strongest categories and streamline operations.
It's an unusual strategy for a retailer at a time when many are slashing jobs and restructuring amid falling sales and poor performance, says Sonia Lapinsky, a director in the retail practice of consulting firm AlixPartners.
"It’s a really forward-thinking perspective that we don’t often see with retailers these days," she says. "Victoria's Secret is doing well and this is the perfect time to be laser focused and make sure they continue to go win the strategic places they’re best at."
Victoria's Secret will also get rid of certain merchandise categories — the brand didn't say which ones — and cut about 200 jobs between its New York office and headquarters in Columbus, Ohio. Other changes include integrating the online business so that it no longer operates as a separate unit from stores.
The restructuring is the first major change implemented since L Brands CEO and founder Leslie Wexner took over as CEO of Victoria's Secret in February. He replaced Sharon Jester Turney, who had been CEO since 2006.
"Coming off a record year, now is the best time to make improvements, going from best to even better," Wexner said in a company statement. "I am certain that these changes are necessary for our industry-leading brands to reach their significant potential."
L Brands also reported March sales Thursday. Sales at stores open at least a year increased 2% at Victoria's Secret and 3% overall for the company, which also owns Bath & Body Works.