How Did It Become A Decline?

It is not surprising that the brand is finally being changed, because news came out very early. But what surprises people is that the valuation of the company is only $1 billion 100 million, which is somewhat "cheap" for a lingerie brand with a history of 43 years and 7 billion 400 million dollars last year.

There are reports this week that private equity Sycamore Partners will spend $525 million to buy Vitoria's Secret 55% stake from L Brands, and its overall valuation of the brand is only $1 billion 100 million.

The dilemma of the virgin parent company

In fact, in 2015, 5 years ago, Vitoria's Secret year revenue was $7 billion 670 million, which could generate nearly 2/3 of revenue for its parent company L Brands, when L Brands's total market capitalization was as high as $28 billion.

However, L Brands has been on the way down since 2015. Now the company's stock price is 1/4 in 2015, and its market value is currently 6 billion 650 million dollars.

For an underwear brand that once defined tens of millions of women in the world, this is an amazing decline.

We can also see what changes have taken place in the company in the past 5 years from the statistics of L Brands in the official website of fortune China.

From the point of view of revenue, its revenue has been climbing slowly in recent years, but its profit has been decreasing year by year.

From the company's profit margin statistics, we can see more problems:

In 2015, the profit margin of L Brands exceeded 10%, but then declined sharply. By 2018, its profit margin had reached below 5%.

In 2019, the financial situation of L Brands was even worse. It even cancelled the end of the year's secret show. This is the most important landmark activity of the brand.

There is a commercial story between L Brands and Wei Ming brand.

Wei Ming, today is like an angel with broken wings.

The secret of Vitoria began in 1977 and was founded by American businessman Roy Raymond. He hoped that men and women could comfortably buy underwear in high-end underwear stores. In 1982, Raymond sold the poorly run San Francisco underwear brand to Weeks Na for $1 million.

Weeks Na was a very capable CEO, and after two years of taking over, the sales volume of the company reached $500 million. By the beginning of 1990s, the brand generated $1 billion a year and became an American underwear retailer.

In 1995, Vitoria's Secret held the first fashion show of the brand. The super models wore fashionable and fashionable underwear, carrying heavy angel wings, wearing heavy makeup and wearing 6 inch high heels to walk on the T stage. The "Wei Mei Xiu" soon became a popular cultural phenomenon. It has attracted millions of viewers every year since it was first broadcast on television in 1999.

Wei Mei Xiu

But the TV program that was broadcast on prime time is also widely criticized for its unrealistic beauty ideals, and its audience is decreasing. In 2018, it attracted only 3 million 300 thousand viewers, down from 9 million 700 thousand in 2013. In 2019, the great show was announced that it would no longer be held.

"I decided to stop working with Vitoria secretly because I didn't think it was a reflection of who I am, and I want to convey a beautiful image to the world," said Carly Klaus, a world famous model who once served as a model of the secret brand in Vitoria.

The underwear chain store has lost its attraction to customers because the underwear they provide is sexy rather than comfortable. Store sales growth for at least one year has seen six consecutive quarters of decline.

As the definition of beauty and sex has changed in recent years, Vitoria's secret has been sticking to the same routine, resulting in the loss of large numbers of customers to competitors.

By contrast, some of the competing brands and start-ups have made models of different shapes, colors and sexes endorse their brands. This inclusive marketing strategy has won a lot of market share for them.

According to a market research firm Coresight Research's survey of women's underwear brands, although the brand is still the largest participant in the underwear industry, its market share dropped from 31.7% in 2013 to 24% in 2018.

In order to cope with the changes in consumer preferences and fierce competition among friends, it is urgent for the company to make different strategies in the market.

Can future Phoenix become Phoenix?

In today's women's underwear market, people no longer value underwear, but pay more attention to comfort. This is a change in the definition of beauty.

Indeed, it needs to change its brand image.

And L Brands's CEO, 82 year old wickenna also because of the relationship with Epstein, so that the weir brand has been questioned, because Epstein is related to "sex scandal".

Who would buy an underwear brand related to sex scandal?

At present, there is a need for a thorough change. Against this background, L Brands sold the secret to private equity fund Sycamore Partners, and wickenna also resigned from the position of CEO and chairman of L Brands, so as to achieve "cutting" with the "secret brand".

Neil Sanders, managing director of data analysis firms GlobalData, believes that after leaving CEO in wex, Weili will undergo some structural adjustment and find a new position in the underwear market.

"In terms of products, we hope that our underwear products are still fashionable and interesting, but we need to focus more on comfort, functionality, materials and experiences that make consumers feel good."

Wei is going through a shower of fire, and whether it can turn back from Phoenix angel to Phoenix, remains to be further tested by the market.

Hopefully, in the future, we will have the opportunity to see the wonderful show.