After a somewhat unspectacular first quarter, Victoria’s Secret parent company L Brands said the intimates retailer won’t be dealing in apparel anymore.
Swimwear and accessories will get the boot, too.
Rumors had been circulating about Victoria’s Secret scaling back on its product range, namely swimwear, since April, and there was talk of a new activewear line taking its place.
L Brands confirmed the no more apparel news with Glamour magazine, the company spokesperson saying, “In order to better focus our resources on core merchandise categories, we have decided to eliminate non-core businesses, including swim, in our Victoria’s Secret lingerie business and shoes, accessories and apparel that were offered in our digital channel but not in stores.” There have been no further updates on a new activewear line.
That means no more neon bikinis, cover-ups, slacks, tunics or footwear will grace the pages of the Victoria’s Secret catalog—which will be altogether eliminated—or its website. Instead the company will focus its efforts on doing what it does best: selling bras, lingerie, sleepwear and fragrance. Cutting out the catalogue business is expected to save L Brands upward of $100 million a year, but company leaders fear it will force the brand from its top-of-mind spot.
To clear some of its soon-to-be-obsolete inventory, Victoria’s Secret has swimwear marked down up to 60 percent, with bikini bottoms starting at $13 and tops at $20.
Last week L Brands reported earnings per share above analysts’ estimates at $0.59 for the first quarter ended April 30, compared to $0.61 in the same period last year and above pegged projections of $0.55. Factoring in $34.5 million in pre-tax charges for severance packages that went to the roughly 200 people that lost their jobs, fabric cancellations and writing off catalogue paper, plus a $78.1 million pre-tax gain for selling its remaining stake in the third-party apparel sourcing business, earnings per share were $0.52 in the quarter compared to $0.84 last year.
Net sales were $2.61 billion, up 4 percent over last year, and comparable sales inched up 3 percent.
L Brands decreased its guidance for 2016 to between $3.60 and $3.80 from $3.90 to $4.10. Shares of the company stock were down 0.41% to $63.28 at close of business Monday.