Victoria’s Secret’s Bid to Make a Comeback on Wall Street

Victoria’s Secret, a brand that once symbolized femininity and glamour for millions of women, is attempting to make a comeback on Wall Street — WWD reported. However, the brand’s resurgence is marred by previous disturbing revelations about its corporate culture. The New York Times investigation in 2020 unveiled a deeply entrenched culture of misogyny, bullying, and harassment within the organization.

At the company’s annual investor meeting, CEO Martin Waters presented a story that encompassed both triumph and struggle. On one hand, Waters emphasized Victoria’s Secret’s impressive $6.2 billion in revenue, $700 million in earnings before interest, taxes, depreciation, and amortization, and its commanding 20 percent share of the U.S. lingerie market. “With 85 million followers on Instagram, we are the second most followed brand on the planet,” Waters said.

Victoria’s Secret’s Ad Campaign 2022

However, there is another facet to Victoria’s Secret’s story. Despite its revenue, the company is grappling with challenges that have driven its market cap down to just $1.2 billion, a mere fraction of its earnings. The company’s enterprise value is just 3.3 times EBITDA, and its stock has experienced a significant drop of nearly 50 percent over the past year.

In his presentation, Waters did not shy away from acknowledging the company’s weaknesses. He highlighted the need to strengthen the core of the company, particularly the sales for Victoria’s Secret and Pink in North America, which have not met expectations.

The challenges Victoria’s Secret faces are not isolated; they reflect a broader trend of declining sales in the lingerie market. Waters attributed this difficulty to changes in consumer behavior, where customers are increasingly opting for lower-cost items. Sales at the company’s stores fell by 15.6 percent to $1.6 billion in the first half of the year.

The brand’s recent history has been marked by a decline in cultural relevance. Once known for defining sexy, Victoria’s Secret lost touch with evolving societal norms, which culminated in a pandemic, an aborted sale, and finally, a corporate spinoff.

The New York Times investigation in 2020 revealed a disturbing culture of misogyny, with Ed Razek, then a prominent executive at L Brands, the parent company of Victoria’s Secret, at its center. Razek’s alleged inappropriate conduct included trying to kiss models, asking them to sit on his lap, and even engaging in inappropriate physical contact with a model during the 2018 Victoria’s Secret fashion show. Despite repeated complaints about Razek’s behavior, Leslie Wexner, the billionaire founder and now former chief executive of L Brands, was informed but did not take decisive action. Instead, some women who spoke out faced retaliation, with model Andi Muise alleging that she was no longer hired for Victoria’s Secret fashion shows after rejecting Razek’s advances.

The culture of misogyny was not confined to Razek alone. Employees revealed that it extended throughout the organization, with reports of demeaning comments and behavior even from Wexner himself. This behavior was shockingly tolerated and normalized, creating an environment where complaints were met with silence or, worse, punishment.

In a bid to regain its standing, Victoria’s Secret has undertaken various initiatives. It aims to generate a media buzz and become a topic of discussion worldwide, with a renewed focus on “empowering women.” The recent fashion show in New York, with its new message, has been deemed successful, generating 17 billion media impressions since September. However, fashion critics like NYTime’s Vanessa Friedman were skeptical. “It’s not enough, in the end, for a brand to simply say it stands for “women.” It has to offer up a coherent point of view on women and what it thinks women need. Especially if what it makes is underwear, that most intimate of garments,” she wrote. 

The company is trying to expand overseas and boost its Amazon business all while leveraging technology from the Adore Me acquisition and merging Pink and Victoria’s Secret stores in mall locations.

The brand is also looking to reinvigorate categories that were previously abandoned, such as swimwear and sports bras. For example, the company lost its market share in sports bras, going from 16 percent to 4 percent, presenting a significant opportunity for recovery.

However, this journey must also involve a critical examination of the company’s values, a commitment to addressing misogyny and harassment, and a redefining of its corporate culture to truly empower women—a challenge that is as critical as any financial comeback.

Demi Vitkute

Co-Founder & Editor

Demi Vitkute is a New York-based journalist and editor who’s passionate about reporting on the fashion industry, its problems, and its changemakers. She’s a founder of The Urban Watch Magazine and has written for The Washington Post, Inside Hook, and Promo Magazine, among others. She is a graduate of Columbia Journalism School and Emerson College.

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