Victoria's Secret has stopped production on all non-innerwear except loungewear and beach lifestyle apparel offered through its catalog and e-commerce unit. The company is clearing out categories including dresses, sweaters, jeans and shoes from its Victoria's Secret Direct business, which is expected to be completed within the next 12 months.
L. Brands, Victoria's Secret's parent company, decided to shed the chain's clothing and accessories business due to sluggish sales. Victoria's Secret will now focus their efforts entirely on lingerie, swimwear and fragrances, and will continue to produce apparel that relates to their core offerings, such as beach cover-ups to go with their bathing suits or pajamas to go with their underwear.
It is estimated that the inventory reductions will result in hundreds of millions of dollars' worth of revenues shed, with one apparel source estimating anywhere between $500 million and $750 million of volume, reports Women's Wear Daily.
Last year, Victoria's Secret Direct generated $1.5 billion in sales while its stores were responsible for $5.3 billion in revenue, accounting for 14 percent and 48 percent, respectively. Of the $1.5 billion in direct sales, $1 billion is in "the core categories that are shared with the stores — lingerie, Pink, swim, sport — and then a little less than $500 million is merchandise that is not carried in the stores," explained Amie Preston, chief investor relations officer of L. Brands.
The elimination of the direct unit is expected to result in job cuts, although the company has not confirmed how many staffers will be eliminated.
-See this Women's Wear Daily article
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