L Brands, owner of the lingerie chain, announced Wednesday plans to close 53 Victoria’s Secrets stores in North America this year, more than three times the 15 it has historically closed in an average year. Victoria’s Secret square footage in North America will drop by about 3 percent with this latest round of store closures. A weak holiday quarter exacerbated Victoria's Secret's recent struggles. Comparable sales were down 3 percent at the retailer, dragged down by a 7 percent decline from in-store sales. Its PINK brand, once a favorite of younger shoppers, saw a low double-digit same-store sales slide in the fourth quarter, while lingerie was flat in what’s normally a big gifting period. Across all categories, increased discounting intended to drive traffic meant margins took a major hit.
Total Retail's Take: As more competition has entered the market — Rihanna’s lingerie company Savage X Fenty, American Eagle Outfitters Inc.’s Aerie, ThirdLove, and Target's plans to launch three new private-label brands specializing in low-cost underwear and sleepwear — Victoria's Secret has seen its spot atop the category take a hit. The brand has been criticized in recent years for its inability to connect with consumers involving themes of female empowerment and diversity. In addition to an image problem, Victoria's Secret has lost customers due to sizing and pricing concerns as more options (including lower-priced ones) have become available for women. The first step in turning Victoria's Secret around will be closing unprofitable store locations; what's next is still to be determined. New leadership — former Tory Burch CEO John Mehas was named Victoria's Secret CEO last fall — and perhaps a brand makeover may help Victoria's Secret recapture lost market share.