Victoria’s Secret’s canceled annual fashion show
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Victoria’s Secret’s annual fashion show, where supermodels once walked down the runway wearing giant “angel” wings and elaborate lingerie sets, will not occur this holiday season.
Stuart Burgdoerfer, CFO of the brand’s parent company L Brands, said on a call with investors on Thursday that Victoria’s Secret would be communicating with customers through social media and other platforms, but that it wouldn’t be “similar in magnitude to the fashion show”, which had been broadcast on network television in the US since 2001.
“We think it’s important to evolve the marketing of Victoria’s Secret,” Burgdoerfer said.
The news ends several months of speculation about the future of the fashion show after Victoria’s Secret said in May that show would not be part of network television this year, leaving open the possibility that it would be live-streamed online instead.
But the show has been drawing a smaller audience for some time, as the brand’s “sexy” image has fallen out of favor with younger consumers and fashion trends have shifted towards bralettes and other less-padded styles.
The fashion show was watched by 3.3 million Americans in 2018, compared with 12 million in 2001 when it was the first broadcast.
The company also suffered a backlash last year when then-CMO Ed Razek told Vogue that the show wouldn’t have transgender models.
L Brands posted a US$151.2 million operating loss in Q3 2019 on Thursday, which includes a US$284.7 million non-cash impairment charge related to Victoria’s Secret store and other assets, and a US$37.2 million charge to increase reserves related to ongoing guarantees for the La Senza business, which it sold in Q4 2018.
Excluding these charges, its adjusted Q3 operating income was US$96.3 million and its adjusted net income was US$5.7 million.
The retailer reported net sales of US$2.7 billion for the 13 weeks ended November 2, 2019, compared to US$2.8 billion for the prior corresponding period. Comparable sales were down 2 per cent in Q3 2019.
The company is expecting a strong Q4, according to Reuters, and said its full-year adjusted earnings per share would be US$2.40, in line with its full-year guidance of between US$2.30 and US$2.60.
Questions & Answers
Q.What is the primary reason for Victoria's Secret cancelling its annual fashion show?
What is the primary reason for Victoria's Secret cancelling its annual fashion show?
The show's "sexy" image no longer appeals to younger consumers, and fashion trends have shifted to less-padded styles. The audience size for the broadcast had also been declining for some time.
Q.How will Victoria's Secret engage with customers now that the fashion show is cancelled?
How will Victoria's Secret engage with customers now that the fashion show is cancelled?
Victoria's Secret plans to communicate with customers using social media and other platforms. However, the company confirmed these new communication efforts will not be as large in scale as the fashion show.
Q.What financial performance did L Brands report in Q3 2019?
What financial performance did L Brands report in Q3 2019?
L Brands reported a US$151.2 million operating loss in Q3 2019, including significant impairment and reserve charges. Excluding these, the adjusted operating income was US$96.3 million and adjusted net income was US$5.7 million.
Q.What were the sales figures for Victoria's Secret’s parent company, L Brands, in the recent quarter?
What were the sales figures for Victoria's Secret’s parent company, L Brands, in the recent quarter?
L Brands reported net sales of US$2.7 billion for the 13 weeks ended November 2, 2019, which is down from US$2.8 billion in the prior year. Comparable sales decreased by 2 per cent in Q3 2019.