The Boss Is Stepping Down? The Secret Of Distress Can Still Be Saved.

According to the Wall Street journal, Les Wexner, the chief executive of L Brands group, is in the process of leaving negotiations. The news once again led to speculation about the future of Vitoria's Victoria s Secret. Wexner has been in charge of this brand for nearly 40 years, and now the underwear giant is in a bad position.

In 1982, Wexner bought Victoria and developed it into an American shopping center and a popular underwear brand in the world. Victoria and Bath & Body have achieved the core business of L Brands, but in recent years they have been working hard to adapt to changing consumer preferences. Such as American Eagle's Aerie and other competitive brands have already relied on the positive body image, taking away quite a lot of market share. But Wexner's management has still been a super sexy figure until recently. The image has brought great success in 1990s and twenty-first Century.

Since 2015, the share price of L Brands has fallen by more than 75%. On Wednesday, its stock price rose 13% after news of potential selling. The company declined to comment.

Reports about possible departure from Wexner have again led to speculation that L Brands will strip or sell the Victoria brand. Some analysts say that the new ownership may push the brand out of the downward spiral and take back some market share, which has been snatched away by Aerie, Rihanna's (Rihanna) Savage x Fenty and other upstarts. Despite the continuing decline in sales and a series of controversies, Victoria's revenue reached $4 billion 500 million in the first three quarters of 2019, far ahead of its competitors.

"Victoria is no longer able to return to its glorious era, but that does not mean that no one can come in and buy this brand at low price and make money," said David Tawil, President of Maglan Capital, a hedge fund focused on non-performing assets.

Insiders say that reversing the situation is not easy; the brand needs to completely transform its identity, including making a 180 degree change in marketing strategy, reducing dependence on shopping centers and investing in customer service.

According to the Wall Street Journal reported on Wednesday, private Holdings Company Sycamore Partners is rumoured to be negotiating with L Brands to acquire shares of Victoria's Secret company. Tawil said: strategic acquisition is also a possibility. He pointed out that Hanesbrands Inc., VF Corp and Berkhire Hathaway Inc's Fruit are all possible, and these companies are likely to integrate their supply chain with the supply chain.

If Wexner withdraws, it will mark a major turning point for L Brands. Under his leadership, Victoria has defined the sexy image of American style for decades. But in the #Metoo era, this image seems inappropriate for many consumers. In addition, Wexner has been censored for its relationship with the notorious wealth manager Jeffrey Epstein. Epstein had been charged with sex charges before he died in prison.

"In short, Wexner is toxic, so the company has better get rid of him," Tawil said.

　　 Marketing needs to be changed.

For decades, the underwear brand has been selling sexy images to consumers through exposed models and provocative advertisements, thus ruling the whole market. Millions of viewers watched their annual annual show, until the ratings dropped sharply, and the brand cancelled the show last year.

While competitors are winning customers with a positive image, the company has launched an "angel" - a standard body model to continue the sexy image of Jia AI's brand. In the autumn of 2018, a few days before the last televised show, its creative director, Ed Razek, gave a scornful comment on transgender and large code models in an interview with the US version of Vogue. He left the company in August last year.

Paying close attention to Ben Romero, a Gartner expert at L Brands and other retail companies, said the new management and ownership will be the opportunity for Victoria to really change its narrative. The brand already has a large number of fans on Instagram and other social media platforms; the rest is to launch a large-scale publicity campaign, embracing all types of body and self acceptance, such as Aerie's "Real" series of advertisements, focusing on physical and mental handicap and different health models.

However, Romero warned that Victoria must be careful about the tone of its marketing. He said: "its propaganda must conform to the brand gene. If not, these initiatives will make people feel too little and come too late.

　　 Inspiration from DTC competitors

Today, compared with this global underwear giant, some of the biggest competitors of Wei are still small upstarts. Nevertheless, these smaller brands have taken the lead in many retail areas, and have their own advantages in terms of customer service and size technology. For example, ThirdLove has introduced a 60 day fit service.

Romero said that Victoria should use its exceptional size data and market influence to imitate some of its strategies, including sending personalized e-mails, focusing on the fit and comfort of products, and considering providing subscription services, such as MeUndie's monthly membership system. Consumers can get a new set of underwear at less than once bought price each month.

　　 Refocusing Pink series

Victoria launched its Pink Series in 2004, targeting young people and minors. According to Ike Boruchow, an analyst at Wells Fargo Bank, 40% of the sales of Victoria's sales now come from the vertical series.

The Pink series "represents the success story of Wei MI, because it has always been considered excellent," he wrote in a report on Wednesday. The series has only recently begun to struggle, which means that it may be more successful than the recovery of the core brand of Vermi.

In August this year, Victoria hired the first transgender model, Valentina Sampaio, to shoot Pink advertising and TikTok publicity for the teen brand, indicating that it will pay more attention to health topics in 2020.

　　 Better use of stores

According to the web site, the company has 1143 stores worldwide. Tawil said that because of its sluggish sales, the brand has ample opportunity to assess its retail network and close its unprofitable stores.

Romero said that Victoria should also consider its store as a distribution center and provide more omnidirectional access functions, such as online purchase and offline delivery. He added that these stores can also be used to organize activities and establish social connections among shoppers. He said, "look at how Ulta can provide makeup and stylist consulting services in their stores, which will create a place where customers can experience."