Victoria’s Secret revealed during its Oct. 13 Investors’ Day presentation that it will attempt to reach $7.3 billion in sales by 2025. As the company recovers from the impact of a tarnished image and DTC competitors, such as digitally native ThirdLove, who have gained market share within the $16 billion intimates business during the retailer’s rebrand, it is trying to overcome what it has termed “execution missteps” that saw sales drop from $7.5 billion in 2019 to $6.6 billion in Q2 2022 trailing 12-month sales results for the period ending July 30, 2022.
Victoria’s Secret has moved away from its previous strategy of a sexualized vision promoted by former CMO Ed Razek under the leadership of Leslie Wexner, CEO of former parent company L Brands, to accommodate shifting consumer preferences. The company is now focused on building from the foundation of its core Victoria’s Secret and PINK brands through campaigns that offer a more realistic vision that resonates with a more inclusive pool of consumers.
“Led by our two category-defining brands and a global business positioned to increase market share, our goal is clear — to be the world’s leading fashion retailer of intimate apparel,” said Martin Waters, CEO at Victoria’s Secret in a statement. “Our market position atop the domestic intimates category is a key strength and growth opportunity for our business.”
During its meeting with investors, the company noted its three pillars for strategic growth:
- Fortify its core through building an inclusive image to reach a broad customer base through stores and digital, which will support market-share growth in the brand’s foundational categories of bras, intimates and beauty;
- Generate growth through building a global footprint with international partners and new brands that promote greater inclusivity; and
- Build an organization that reflects a more modern approach to “people and culture” through the company’s workforce and ESG guidelines.
“We have created a solid financial platform during the last 15 months as a public company,” said Waters. “With our new operating structure in place, we now have even greater agility and an aligned focus on our customer and our strategic priorities. We are positioned to deliver sustainable long-term sales growth and mid-teens operating margin rates over time, and we expect the power of our model will generate significant cash flow to invest in growth and also return value to shareholders through our capital allocation strategy.”