Victoria’s Secret shows how reluctance to embrace the plus size market can hurt a clothing company

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Victoria’s Secret took so long to adopt a more positive and diverse branding image that it opened the door for other companies to reduce its dominance.

Best known for its “super sexy” marketing, Victoria’s Secret stuck to its storyline even as shoppers, many of whom are Millennials and Gen Z, sought more inclusive brands.

Victoria’s Secret is still a leader in its category, with first quarter sales of $ 1.554 billion and comparable sales up 9% from the same period in 2019. But its share of the lingerie market has halved in about half over the past 10 years, according to Canaccord Austin analyst. Mold, at 15% against 30% previously.

Others, however, remain optimistic about the company.

“We continue to stress that we have never felt so high above consensus and reiterate L Brands as our main idea,” BMO Capital Markets wrote in a May note. BMO rates L Brands shares outperforming with a price target of $ 90.

L Brands shares nearly doubled, up 91.8% for the year to date. The S&P 500 SPX index,
+ 0.03%
gained 14.3% over the period.

But Victoria’s Secret is on its own, parting ways with Bath & Body Works, and lags well behind other companies that have already made gains in the growing plus size clothing market and the positive body movement.

“This means a new dawn for brand advertising, which is expected to follow with more inclusive size products,” the retail market information platform Edited wrote in a report this month. this. “However, its shift has already opened up the market to hyper-successful brands with inclusiveness built into their aesthetics such as Parade and Savage x Fenty.”

See: Victoria’s Secret Launches Women-Focused Brand Ambassador Panel That Includes Megan Rapinoe and Priyanka Chopra Jonas Ahead of Company Separation

Edited quotation data showing the plus size clothing market will reach $ 697 billion by 2027. “Combined with Gen Z challenging businesses to break traditional beauty molds and embrace sizing fashion various, retailers in 2021 can no longer risk excluding body types from their lines, ”said Edited.

The Brands L Inc. LB,
+ 0.34%
The Victoria’s Secret spin-off features a new name, Victoria’s Secret & Co., and a new branding. Gone are the “angels” of the past for a panel featuring football star Megan Rapinoe, author / actress / producer Priyanka Chopra Jonas, model and body positive advocate Paloma Elsesser, and journalist and advocate for equality Amanda de Cadenet.

“Through a series of collaborations, business partnerships, and cause-related initiatives, we are bringing new dimensions to our brand experience,” said Martha Pease, director of marketing for Victoria’s Secret, in a statement announcing the panel. .

AEO of American Eagle Outfitters Inc.,
+1.28%
The Aerie brand has become a serious competitor to Victoria’s Secret, with American Eagle executives aiming to grow Aerie into a $ 2 billion brand, specializing not only in underwear, but also in leggings, swimwear. bath and other categories sold by Victoria’s Secret.

“Demand for Aerie continues at a rapid pace, resulting in significantly higher sales, margins and profitability,” said Michael Mathias, chief financial officer of American Eagle, on the latest results conference call. society.

Also: American Eagle sales could quadruple as shoppers switch from sweatshirts to mom jeans

GPS from Gap Inc.,
-0.24%
The Athleta brand, which is also on the rise, announced earlier this year that it had expanded its sizes to include sizes 18 to 26, with 70% of the brand’s collection available in those plus sizes by spring.

And Torrid Holdings CURV,
which specializes in fashion for sizes 10 to 30, recently filed for an IPO.

The edited report notes that the average customer in the United States wears plus-size clothing and that business demand and investment is growing.

“While body diversity becomes entrenched in fashion, the waist more straight
retailers are adopting brands that meet larger than average sizes, ”said Edited.

Still, there are challenges for the plus size market, starting with the name. Edited and others say that calling the items “plus size” makes many buyers feel like they are apart.

Large items are also generally more expensive and are often excluded from trends.

These issues are not new and the addition of extended sizes at retailers and brands is not a recent development. But the problem is perhaps now more pressing for brands and retailers.

Lily: Adidas launches period-proof tights as sports companies turn to women

A quarter of respondents to the March 2021 NPD Group Trend Tracker survey “felt that inclusive and diverse representation within a company’s marketing / advertising, covering all ethnicities, sexual orientations and body types, was a key area to focus on when it comes to fashion. ”

One in five people also said that inclusive and diverse representation among company leaders is important.

“To achieve true inclusion, trends have to be universal for all sizes,” Edited said in its report.

Edited says the luxury sector is the most vulnerable.

“The reluctance of the market to evolve while the younger generations are so impressed with inclusiveness could see it alienating future profits and consumers maintaining a distorted and outdated image standard,” the report said.

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