Wei Underwear Is In A Precarious Position And The US Market Share Is Only 24%.

The more than 30 year of glory is the most critical moment in history.

From the change of CEO, to the reintroduction of the swimsuit series, and to the decision to stop the annual show, the reform of the American sexy lingerie brand is becoming more and more frequent, but the situation behind it is cruel.

According to Coresight Research's report, its market share in the US dropped from 31.7% in 2013 to 24% last year, while the market share of emerging competitors such as Thirdlove and Savage x Fenty has increased from 28.1% in 2013 to 36.2%.

At the same time, sports brands such as Nike, Adidas and Lululemon are also invading the underwear market. The first three underwear products occupy 0.2% of the market share.

Coresight Research pointed out in the report that the change of market trend and the continuous emergence of competitors are the main reasons for the decline of its performance.

The report also stressed that over the past 10 years, more and more participants have rewritten the rules of the American underwear market in a subtle way. With the rise of artificial intelligence and other technologies, the definition of sexy has evolved constantly. Comfort and fitness have become their new demands for underwear.

The Cowen analysis agency led by Oliver Chen, after conducting in-depth research on the business of Weimi, is similar to Coresight Research. More than half of the respondents said that they would think of "sexy" when they saw it, and 55% of the group thought comfort was the decisive factor when they bought underwear. "The rise of brands such as Aerie, ThirdLove, Adore Me and True&Co. fully confirms this trend. The brands born on the Internet also have the advantage of real-time data control and timely feedback, which is more flexible than the traditional underwear salesmen in dealing with market changes."

According to fashion headline data, American Eagle Outfitter's lingerie brand Aerie rose 32% in the latest quarter, and it first entered the $500 million club last year.

In the fourth quarter of last year, sales declined by 5.1% to $2 billion 531 million from 2 billion 668 million US dollars in the same period last year, while same store sales fell 3%, and revenue decreased 0.17% to 7 billion 375 million US dollars a year.

Contrary to the sexy line of sexy, Aerie does not have sexy supermodels, nor exaggerated lace products. Instead, it invites various models to shoot advertisements, even pregnant women's stretch marks are printed on advertisements, aiming at encouraging women to bravely "please themselves".

In order to fully support the revival of the secret service, L Brands has shut down a century's luxury handbag brand Henri Bendel and sold Canada's underwear business La Senza since last year, and announced that it will halve the interest on shareholders and save 325 million US dollars for debt repayment.

Its net profit fell by 34.5% to $640 million a year from the downside of its downbeat performance. Even though it received an open letter from the radical investor Barington Capital, it had never wavered.

Stuart Burgdoerfer, chief financial officer, said that he would continue to increase investment in the marketing of secret goods, and actively close down redundant stores.

In the fiscal year ending February 2nd, it has closed 30 stores, and will shut down 53 stores in the North American market this year. Cowen believes that there are 150 redundant stores that should be eliminated.

It is reported that in the past 10 years, the company has opened 820 stores, closed 673 stores, and sold 130 stores' management rights.

At the same time, the company did not stop the pace of international expansion.

Since its massive entry into the Chinese market in 2017, it opened new stores in Peru, France and Italy last year.

Facing the increasingly crowded track in the underwear market, Stuart Burgdoerfer chose to take an optimistic attitude and think that the breakout is focused on product differentiation. As long as the product is sufficiently special, unique, fashionable and innovative, the brand still has great potential in the field of underwear, so the future focus of development will return to the product.

Fashion headlines reported earlier that the most important driving force for growth is not underwear and other core businesses, but beauty and accessories. In order to reverse this situation, the first initiative of the new CEO John Mehas after taking office was to re launch swimsuit series, which stimulated the group's stock price to rise by 3% on the day, which was regarded as a positive signal by UBS analysts.

Swimsuit series was once one of the most profitable businesses of the company. It was called off in 2016 because of the brand strategy adjustment, resulting in a sharp decrease of $500 million in sales in that year.

In February 18th, it also launched a new high-end underwear series with French designer underwear brand Livy, ranging in price from 50 US dollars to nearly 500 dollars, mainly through the brand online platform and the sale of the flagship store in Fifth Avenue and New Bond Street in London, which is the first time that New York has sold other brand products in the store.

What it means is that when Nike, Adidas and other sports tycoons invaded the underwear market, they also accelerated to expand their sports apparel. In the reorganization plan of John Mehas, sports and leisure products have become one of the focuses of this year's attention.

However, some analysts believe that in order to restore the lost market share, it needs to change more than the product is so simple. With the diminishing marginal effect of "sexy", the commercial value of the secret brand is already on the verge of bankruptcy.

Whether it was the establishment of the first store in 1977 or the first time in 1995, the "sexy" as the main selling point, and the most attractive male underwear brand in the eyes of female consumers, has always been out of date, and there is a risk of inciting consumers' negative emotions.

In 2014, it was attacked by consumers because of the slogan "The Percect Body". It was accused of a healthy attitude towards the next generation of women. A mother said that she had nursed her daughter's good diet and work habits from childhood, and the advertisements such as "Wei Ming" almost appeared every day, which virtually affected the mentality of the young people.

Last year, a speech by Ed Razek, the chief marketing officer of the company, made an instant drop in the bottom of the brand.

He admits to the editor of Vogue that brands are not interested in big codes or denatured models.

Australian model Robyn Lawley then put forward a fashion show to boycott the "narrow aesthetic" on the petition website, and launched the topic of "#WeAreAllAngels" on social media such as Instagram.

Perhaps aware of the seriousness of the problem, the official account profile on Instagram has been changed to "Confidence is Sex (confidence is sexy)", which means that brand DNA is gradually changing to encourage female consumers.

In the past two years, with the rise of the fitness trend, the company has also advocated a new way of life by promoting the healthy lifestyle of supermodels.

Leslie Wexner, chairman and chief executive of L Brands, said in a letter to employees earlier this month that it would make a major adjustment to the "secret show", and stressed that fashion is a changing industry that can only grow through development and pformation. TV and Internet are no longer suitable for the big show. They will reassess the traditional secret show and look for new forms after 2019.

Leslie Wexner also admitted that the decline in the popularity of the Aerie and the downturn in its performance were not only affected by the emerging underwear brands such as Aerie, but also their neglect of the big code women's underwear market, which accelerated the loss of market share.

According to the fashion headline data, the ratings of the show in 2015 dropped by 30%, and the number dropped to 6 million 590 thousand.

In 2016, the audience rating of viewers aged 18 to 49 was only 2.1, compared with 2.3 in 2015, which was reduced by 9%.

In 2017, the ratings of the Shanghai show dropped by 30%, while the total audience number was less than 5 million, of which 18 to 49 years old audience ratings were only 1.5.

Last year, the ratings of ABC, which was broadcast by the ABC, continued to decline. The total number of viewers dropped to 3 million 270 thousand, of which the audience rating of viewers aged 18 to 49 was only 0.9.

L Brands did not disclose more information about the next step of the development of Leslie, but Leslie Wexner said in its memorandum that they will focus on digital development in 2019.

Two weeks ago, the group has registered a new trademark, "First Love", which is regarded as a move by the industry to mark the Third Love.

Up to now, L Brands, a virgin parent company, has refused to respond to the fall in the market share. However, a spokesperson showed that fans in the social media platforms such as Instagram, Twitter and Facebook far exceeded Adore Me, Aerie and ThirdLove competitors in a slide showing in the group's annual earnings report.

He takes Instagram as an example. The number of fans has been more than 66 million, while Aerie is only 1 million 100 thousand, and fans of Adore Me and ThirdLove are 426 thousand and 272 thousand respectively.

Jen Foyle, President of Aerie global brand, believes that although the sales volume of one day is catching up with its annual sales volume, the trend is an indisputable fact. It also revealed that the number of stickers with #AerieReal tags increased rapidly from 88 thousand to 154 thousand posts between January 2018 and January 2019, and the number increased rapidly to 179 thousand and 500 in May.

Veronica Webb, a supermodel who participated in the first big show, also told the women's Wear Daily that Aerie is the most popular underwear brand for her and her daughter.

However, Veronica Webb also pointed out that no matter who is the current Aerie or the same year, it is not easy for people to make a final conclusion on who is the mainstream now. After all, fashion is a cycle. Nowadays, the trend of comfortable underwear is similar to that in 60 and 70s. "Pendulum will swing again after 10 years, and fashion is just as changeable as women."

To be sure, Wei has already stood at the crossroads of reform. After a series of intensive adjustment, investors pay high attention to the pcript of the first quarter of L Brands new fiscal year.

Analysts are mainly cautious about the group's earnings report after Wednesday's close.

Bloomberg analysts expect L Brands to achieve a break even in the first quarter of April 20th. Sales will drop from $4 billion 800 million in the previous quarter to $2 billion 500 million, unchanged from the same period last year.

Wedbush analyst Jen Redding wrote in a report released in early May that the Pink series became the highlight of the first quarter performance report.

Ike Boruchow, a senior analyst at Wells Fargo, predicts that the new initiatives in the near future will not be effective, and that it will not be seen until the second half of this year.

Over the past year, the cumulative decline of L Brands has exceeded 33%, and its market value is about $6 billion 200 million, a 5 year low.

Author: Zhou Huining