Can Wei Continue To Write Supermodel Myth? The Millennial Generation Is The Key.

According to the world clothing and shoe net, the exposure rate is not equal to the profit, under the banner of the parent company L Brands.

Medium,

It is the most concerned and stressful one.

L Brands has always expressed its hope that it can re-examine the positioning of its brand in 2017 and revitalized its overseas market and concern for the "millennial generation" consumers.

Through in-depth research and interviews with the founder of a well-known underwear brand, we have grasped the major trend of the underwear industry.

Here we share our in-depth analysis of Wei.

L Brands (NYSE: LB) is a headquartered in Ohio, USA.

Retailer.

The company has many well-known brands, such as Victoria 's Secret and Bath & Body Works.

Bath&Body Works is one of the leading retailers in personal care, soap, disinfectant and household perfume products.

More than 1600 stores in the United States and Canada are selling online on their own websites.

In addition, Bath&Body Works gives business licenses in 125 stores in 30 other countries.

Victoria 's Secret is not unknown to everyone. The secret show in Vitoria every year is the focus of the world.

Victoria 's Secret includes PINK as the main brand of L Brands, and its profit accounts for more than 60 of the total profit of L Brands.

The secret of Vitoria not only has more than 1100 stores in the United States, Canada and the United Kingdom, but also sells products on its own website; in addition, Vitoria's secret business license is granted in 390 stores in more than 75 other countries.

Financial situation

In early February 2017, L Brands released sales in the fourth quarter of 2016 and throughout the year.

Victoria 'sSecret total sales of $77.8 billion, accounting for 61.9% of the total sales in 2016; Bath & Body Works total sales amounted to $38.5 billion, accounting for 30.6% of the total sales, compared with 2015 growth of 7.4%; Victoria' s Secret and Bath & Bath's overseas sales amounted to 100 billion, accounting for 3.4% of the total sales; other products sold for 100 billion, accounting for 4.1% of the total sales.

L Brands released the unaudited quarterly report in the last quarter of 2016.

As can be seen from the report, L Brands's operating income is 8% lower than that of the same period last year. The main reason for this reduction is that the sales of Victoria 's Secret decreased by 17%.

So why is the sale of Victoria s Secret going down so much? So we are going to start in 2016.

In August 2016, the Victoria 's Secret report showed that the sales of its swimsuit series continued to decline, and the swimsuit market was nearly saturated. Victoria' s Secret will face enormous challenges in the swimsuit market. Although swimsuit sales accounted for about 6% of the total sales, the management decided to abandon the product and withdraw from the swimsuit series, focusing on the development of its core products.

So, without the sales of swimsuit products, the total sales of Victoria 's Secret decreased compared with that before.

L Brands also posted a net sales of $765 million 500 thousand in the four week ended February 25, 2017 2017, a decrease of 10% compared with the net sales of $849 million 300 thousand for the four weeks ended February 2016.

The withdrawal of swimwear products had a negative impact on the comparable sales of the head office and Victoria 's Secret, respectively, 6 percentage points and 8 percentage points respectively.

For L Brands, the financial situation in the beginning of 2017 was slightly weaker. From the more conservative budgetary projections of management, the management expects that the sales figures in 2017 will be reduced by a single digit percentage, the reason for the withdrawal of swimsuits and the percentage increase in sales will be increased.

Management expects EPS to be $3.05 to $3.35 in 2017, and capital expenditure to $8.5 billion to $9 billion in 2017.

Moreover, IBISWorld analysts believe that Victoria 's Secret share accounts for 61.8% of the total underwear market.

It can be seen that although Victoria's s Secret has been affected by its financial withdrawal from swimwear products, it has a strong market share and is still actively developing in 2017.

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Overseas expansion

Although L Brands's revenue in 2016 suffered from Waterloo's withdrawal from swimwear market, its expansion of overseas market will bring huge profits to its future.

Its most notable overseas expansion is the opening of China's first Victoria 's Secret flagship store in Shanghai, China, and it is expected to open 6 stores in China by the end of 2017. Not only that, the 2017 secret show may also be held in Shanghai, which will not only greatly stimulate sales in China, but also expand its publicity in China.

In Shanghai, the price of bra sold by Victoria s Secret is about $87 between 300- and $600.

Luxury underwear brands and high quality products are becoming more and more popular among Chinese women.

According to Euromonitor, the retail value of the Chinese women's underwear market is expected to reach US $25 billion in 2017, two times that of the United States, and will grow to 33 billion US dollars by 2020.

Martin Waters, President of L Brands international, said that the annual sales of these stores in China are expected to be $150 million.

The millennial generation is the key.

The founder of a lingerie brand we interviewed in California shared with us that the key to the continued prosperity of the Victoria 's Secret brand is the millennial generation.

Because of the rise of emancipation, feminism, and resistance to materialized women and over slender, Vitoria's brand value is partly inconsistent with the values of many millennial women, with limited penetration at that age.

In 2016, L Brands carried out some commercial restructuring of Victoria 's Secret.

Victoria 's Secret fired more than 200 employees and reorganized the three sectors of Victoria' s Secret underwear, Victoria 's Secret Beauty and PINK.

The aim is to target customers in the millennial generation that is entering the University.

Victoria 's Secret hopes to be a must for every college girl to buy underwear and casual wear.

In order to attract the millennial generation, Victoria s Secret hired celebrities such as Gigi Hadid, Adriana Lima and Laetitia Casta to promote the show in the context of star efficiency.

Victoria s Secret is a good way to attract the millennials to digitize market sales.

The company has been actively producing content for Pinterest and YouTube and building bridges from mobile media resources, which is an important factor for the millennials to consider.

In addition, the image of the Virgin brand has made the misses miss the larger women's underwear market.

According to IBIS World, the market value of large size underwear is $90 billion, while Victoria 's Secret has missed the market.

Competitors: Aerie and Adore Me

Although Victoria s Secret has strong market share, it also faces fierce competition.

Our industry experts believe that Adore Me and Aerie represent the two largest competitors in the world.

First of all, I would like to talk about the Adore Me, Adore Me underwear and related products that were launched by the former Secretary General of Vitoria.

The company offers subscription services, launches 30 to 40 new projects every month, and offers bra from 30A to 44G cups to consumers.

Adore Me also uses intelligent interaction through social media, mobile, e-mail and television exclusive promotions.

70% of the Adore Me brand traffic comes from its mobile apps.

So in addition to bathing suits and pajamas, income also increased from $1 million in 2012 to $43 million in 2015, and the sale of bra and Bottomwear sets to 39.95 US dollars to 49.95 US dollars.

Moreover, Adore Me also pays attention to the sale of large size underwear.

We believe that Adore Me Costco can get users quickly through investors' subsidies and discount to consumers. At the same time, through the discount system of members of the Costco mode, users can be saved. By saving the cost of the stores, there will be a certain cost advantage that can be spent on tailoring and cloth, which has caused the price of medium underwear to be greatly reduced.

The impact of this kind of online underwear brand is the biggest.

Next is Aerie, whose parent company is American Eagle Outfitters.

JenFoyle, President of Aerie global brand, said that in the past year, Aerie's customer base has increased by more than 10%, and the company's seven consecutive quarterly profit growth.

All in all, we think that Victoria's Secrets and Tiffany Tiffany (Code: TIF) are among the few retail brands in the retail industry that have high brand awareness and customer stickiness, which deserve investors' long-term concern.

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