Victoria’s Secret is in a streamlining state-of-mind.
The company on Tuesday said it has cut 160 management roles as it restructured operations to create a simplified leadership structure that combines its Victoria’s Secret (VS), Pink and Beauty businesses into a single, collaborative organization.
As part of the restructuring, the company named Amy Hauk CEO for the VS and Pink brands. She has been CEO of Pink since 2018. In her new role, Hauk will integrate merchandising, planning, marketing and creative teams to apply best practices and consumer insights, as well as speed the company’s test and learn agenda. Christine Rupp will join the company as chief customer officer, with responsibility for creating a seamless store and digital commerce business globally. Rupp joins VS&Co. from Albertsons, where she was chief customer and digital officer. She previously was at Microsoft and Amazon, where she led Fulfillment by Amazon and launched Amazon Prime Day. Greg Unis, who led the VS and Pink Beauty businesses, was named chief growth officer. In his new role, he has responsibility for the VS&Co-Lab platform, new business development, international expansion and mergers and acquisitions opportunities. Unis will continue to lead the company’s real estate and store design and construction teams. All three will report to Martin Waters, VS&Co.’s CEO.
“Over the last year, we have progressed a thoughtful revolution of our business by redefining the VS brand and rebuilding our strategy for growth. We can now better connect with and represent our millions of customers around the globe. As a result, we have more relevant brand positioning, more compelling merchandise assortments, and a more inclusive culture that celebrates our people,” Waters said. “With our brand revolution well underway and gaining momentum, now is the time to reimagine our leadership structure to better align with a shifting consumer landscape and become more efficient as an organization.”
Waters said combining the brands as a single, collaborative organization under Hauk’s leadership will bring greater focus and discipline to the company’s merchandising expertise, while combining the store and digital channels under Rupp’s oversight will “move us from being a company of ‘shop keepers’ to being a company of ‘customer keepers.'” The two initiatives are expected to free up time and resources so Unis and his team can focus on growth, Waters said.
The structure of the reorganization collapses silos, and the streamlining allows VS&Co. to reinvest in growth opportunities, the company said. The restructuring has led to a 5 percent reduction in the home office headcount, or 160 management roles, while providing for investment in non-leadership roles focused on executing the company’s strategic initiatives, the company said.
VS&Co. said the reorganization will result in an estimated $40 million in cost reductions on an annualized basis starting from the third quarter. The company also will record a non-GAAP charge of $30 million in the second quarter of fiscal 2022 related to the moves.
Dana Telsey, chief growth officer at Telsey Advisory Group, maintained her “market perform” rating on shares of VS&Co. “The announced organizational changes at [VS&Co.] largely keeps familiar faces at the company, maintaining consistency amongst the senior leadership team,” she said, noting that the headcount reduction will help to offset increased cost pressures connected with ongoing macro challenges.
Jefferies analyst Corey Tarlowe said the streamlined operations and initiatives should help drive a more profitable organization. He said that the company is “on the path to recovery, with sales momentum gaining and brand sentiment improving,” although Tarlowe did note that near-term top-line trends remain partly pressured by supply chain headwinds. Still, VS&Co’s long-term opportunity remains unchanged, and he concluded that the company is capable of restoring lost sales while recapturing margin.
Wall Street appeared unimpressed by the news, with shares hitting a 52-week low of $26.42 in early trading on Wednesday. The once high-flying label has faced increasing competition in recent years, and tried to tone down its ulta-sexy image and marketing to become more inclusive.
Victoria’s Secret has also seen negative headlines this week as a new docuseries is airing on Hulu that chronicles the financial relationship between its founder Lex Wexner and convicted sex offender Jeffrey Epstein.
The company completed its separation from former parent L Brands Inc., renamed as Bath & Body Works, last year.