Victoria’s Secret will cut 200 corporate jobs as it looks to kickstart growth and cut organizational bloat, its parent company L Brands (LB) said on Thursday.
L Brands will reorganize Victoria’s Secret into three units: Victoria’s Secret Lingerie, PINK (a more youth oriented brand) and Victoria’s Secret Beauty, news that comes just weeks after long-time brand CEO Sharen Turney abruptly stepped down as the L Brands’ biggest division. The heads of each Victoria’s Secret unit will report directly to L Brands Chairman and CEO Leslie Wexner.
The goal is for Victoria’s Secret to “narrow our focus and simply our operating model,” Wexner said in a statement.
Though Victoria’s Secret, a mainstay in U.S. Pop culture thanks to its annual fashion show that draws supermodels and the day’s big music stars like Taylor Swift, has performed well in recent years by offering inexpensive but trendy lingerie, its product offering has grown bloated. So the Victoria’s Secret re-organization is aimed in part at focusing on product categories with the most promise, meaning it will ditch some of its assortment. That includes its swimwear lines.
The change comes amid intensifying competition in the lingerie market. Founded in 1977, Victoria’s Secret has long been the leader in the women’s lingerie market, with $1.1 billion in revenues in 2015. But as reported last month by Coins2Day, there is a lot of competition from up and coming brands, and even established brands like American Eagle Outfitters’ (AEO)Aerie.
The job cuts were announced as L Brands announced its March sales. As if to prove the point, the company said Victoria’s Secret’s gross merchandise margin had fallen last month because of its attempt to reposition its beauty segment. Still, Victoria’s Secret said comparable sales grew 2% last month, numbers that would be the envy of most apparel retailers. At L Brands as a whole, which includes Bath & Body Works and La Senza, same-store sales rose 3%. Total company sales increased 4.7% to $1.03 billion in March.
The 200 job eliminations will be in New York and at company headquarters in Columbus, Ohio.