The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
It was the week’s other surprise CEO switch.
On Wednesday, Victoria’s Secret announced it would replace chief executive Martin Waters with retail veteran HiIlary Super. The news was overshadowed by Starbucks’ shocking dismissal of CEO Laxman Narasimhan the day before. But the lingerie brand’s long-suffering investors certainly took note: shares of the company have surged more than 25 percent.
Super isn’t a household name, even in retail circles. But her experience is cause for optimism at a brand that could certainly use some right now. Crucially, Super has for the last year served as CEO of Savage X Fenty, where she took the reins from Rihanna herself at the singer’s underwear start-up. (Super also ran Anthropologie for four years and has held senior roles at Guess, American Eagle and other brands.)
With decades of merchant experience at mall retailers, Super has the right resume to increase product innovation, build customer loyalty and improve marketing efforts, TD Cowen analyst Jonna Kim wrote in a research note Wednesday. All that will be necessary to help the brand find its voice in a category that’s become crowded with upstarts — Savage X Fenty among them — offering a fresher take on the Victoria’s Secret formula.
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“We believe the new CEO at the helm could start a new chapter for the company,” Kim wrote.
We’ve been down this road before, of course. Victoria’s Secret promised a fresh start when it was spun off from L Brands – and controversial owner Les Wexner – in 2021. The brand quickly shed the hyper-sexualised aesthetic that defined it for decades under Wexner, adopting an inclusive image that mimicked its fast-growing challengers.
That gambit didn’t work. Sales continued to decline, and the disruptors kept growing. Last autumn, the company said it would reverse course. Recent campaigns are reminiscent of the high-gloss vampiness of its heyday, albeit with a more diverse range of body types. The annual fashion show that Victoria’s Secret had done away with in 2019, amid scandal, is coming back later this year, it announced in May.
Super’s most important job is to clearly define what the brand stands for to consumers puzzled by the recent flip-flops. Jettisoning the Y2K-era marketing formula didn’t work, but neither has grafting body positivity onto it. Figuring out what identity Victoria’s Secret will convey to shoppers — and then selling that vision with strong merchandise and well-designed stores — is the task at hand.
It can be done. Abercrombie & Fitch is reaping the rewards of a rebrand that began a decade ago, when the retailer was also mired in scandal and widely regarded as out-of-touch. Gap is also seeing promising early returns from a similar top-to-bottom revamp under CEO Richard Dickson.
Victoria’s Secret still has a commanding lead in its lane of the underwear market. And brand president Greg Unis wasn’t wrong when he told investors last October that “sexiness can be inclusive.” The company hasn’t figured out how to turn that slogan into reality. Now it’s time for Super and her team to have a try.
THE NEWS IN BRIEF
FASHION, BUSINESS AND THE ECONOMY
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US retail sales rose more than expected in July. Retail sales increased 1.0 percent last month after a downwardly revised 0.2 percent drop in June, the US Census Bureau said. Signs that demand is not collapsing could prompt financial markets to dial back expectations for a 50 basis points interest rate cut next month.
Tapestry gains as quarterly profit beats Wall Street’s view. The company posted a revenue of $1.59 billion, narrowly beating projections. Tapestry’s strategy of increasing the average price of its handbags in recent quarters has improved profitability.
On records another bumper quarter. The Swiss sneaker giant reported net sales of CHF 567.7 million ($654.4 million) in its most recent quarter, up 28 percent from the same period last year. On received a boost from its recent expansion into apparel and accessories.
Branded resale provider Trove acquires Recurate, a competitor in the space. The addition of Recurate’s 29 brand clients means Trove will now generate 75 percent of total online branded resale traffic, the company said.
Walmart lifts full-year outlook on strong apparel sales. Walmart said comparable sales in the US rose 4.2 percent last quarter driven by higher units and transactions. Walmart’s bullishness points to an increasingly selective US consumer facing economic uncertainty and high interest rates.
Anna Wintour and Tory Burch to attend Hamptons fundraiser for Harris. Vice President Kamala Harris will host a high-profile Southampton fundraiser on August 31, with tickets ranging from $2,500 to $50,000.
Pandora raises full-year growth outlook as broader product range pays off. The company said its operating profit rose to 1.34 billion Danish crowns ($196.25 million) in the second quarter from 1.19 billion a year earlier. Its full-year organic growth guidance is now between 9 percent and 12 percent.
JD.com beats quarterly profit estimates. The company’s second-quarter profit rose 73.7 percent. The company’s total revenue rose 1.2 percent to 291.40 billion yuan ($40.71 billion) in the second quarter, compared with estimates of 292.89 billion yuan.
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Goldman agrees to sell Ireland’s largest shopping mall to SVP. Strategic Value Partners is set to buy Blanchardstown Centre, Ireland’s largest mall as investor interest in malls rises due to lower rents and increased consumer spending.
Alibaba misses quarterly revenue estimates. The company’s domestic e-commerce sales came under pressure from cautious spending by Chinese consumers in a faltering economy. Alibaba reported revenue of 243.24 billion yuan ($33.98 billion) for the quarter ended June 30.
THE BUSINESS OF BEAUTY
Avon Products files for bankruptcy to wrangle talc lawsuits. The firm has already incurred $225 million of costs defending personal injury lawsuits and settlement payments, according to court filings. As part of the filing, Avon Products’s assets will be marketed, with Natura offering to buy it for $125 million in the absence of higher offers.
Crown Laboratories and Revance will merge in a $934 million deal. Under the agreement, Crown would acquire all of Revance’s outstanding common stock shares at an 111 percent premium. Revance will be delisted from the Nasdaq and the new company will be a private entity.
Equinox-owned Blink Fitness files for Chapter 11 bankruptcy. The company, the latest chain to succumb to stiff competition and higher costs. Blink plans to keep operating while it tries to sell itself out of bankruptcy
Berkshire Hathaway takes a stake in Ulta Beauty. Warren Buffett’s Berkshire added 690,106 shares of Ulta Beauty, according to a regulatory filing. Its stake in Ulta was worth about $227 million, based on Wednesday’s closing price.
Roz hair raises growth equity from Silas Capital and G9 Ventures. The prestige hair care line launched in 2021 and coins Credo and Neiman Marcus as stockists. The funding will be used to accelerate retail expansion, introduce new products and increase headcount.
PEOPLE
Shein hires ex-EU official to bolster lobbying as IPO nears. The online fashion retailer hired former EU budget commissioner Günther Oettinger as a consultant to help it navigate the bloc’s policy environment. Shein faces a raft of issues including a debate whether to impose customs duties on cheap parcels.
Victoria’s Secret taps Savage X Fenty CEO to lead turnaround. Hillary Super will be Victoria’s Secret third leader in four years and brings nearly three decades of experience in retail. Super replaces Martin Waters, who was terminated as CEO, as chief executive officer and a member of the board.
MEDIA AND TECHNOLOGY
US FTC finalises ban on fake online reviews. The ban on companies knowingly buying or selling fake online reviews, including those written by AI, gives the agency the power to levy fines against the shadowy practice. The FTC can seek a maximum penalty of up to around $51,744 per violation.
Compiled by Yola Mzizi.
