- Victoria’s Secret
Victoria’s Secret may be resorting to the retail industry’s most dangerous strategy.
The company is famous for its Semi-Annual Sale, which means customers have to wait for bargains. If they can’t, they pay full price. But more recently, Victoria’s Secret held another sale before the Semi-Annual Sale. And that could be a troubling sign, if it means that the company is giving in to the urge to increase markdowns for the sake of foot traffic.
Incessant discounting is a problem that’s plaguing the retail industry, as many consumers have been conditioned to shop only at sale price. Once you go there, it’s difficult to ever come back, as companies like Banana Republic have recently been forced to admit.
“I will be the first to say that when you start tightening up in promotion, you are playing a game of chicken with your customers,” Gap Inc.’s CEO Arthur Peck said on a recent conference call. Wedbush Securities analyst Lupine Skelly wrote in a note Wednesday that during this year’s Semi Annual Sale, both bras and swimwear were discounted at much deeper rates than they were last year. Granted, the company is phasing out its swimwear sector, and a spokeswoman for the company said the additional sale was intended for that purpose. Victoria’s Secret is restructuring its business to zero-in on three major categories: lingerie, its younger sister brand, Pink, and its beauty sector. But Skelly notes that some online beauty discounts were as steep as 70%. She notes that the company was not discounting its bralettes – the padding-free bra that’s currently on trend – but with many other retailers also selling bralettes, they’re not particularly unique to Victoria’s Secret.
The new sale was called the “One Sexy Sale” and ran right up until the day before the regular Semi-Annual Sale began, according to Skelly.
“Although the initial turnout for the Semi-Annual sale looks acceptable, we are concerned by the deeper discounts on bras and feel that the push used to get customers shopping the One Sexy Sale during the second half of May could dampen the results for the Semi-Annual Sale especially given the similarity of product and discount,” Skelly wrote in the report.In May, the company advertised the “One Sexy Sale” in its Flatiron store’s window:
- Mallory Schlossberg/Business Insider