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Sep, 11 2018

Victoria's Secret and its Pink franchise begin to decline

The August sales of Victoria's Secret's same-store dropped by 5% compared to the previous year.

According to analysts, Victoria's Secret and its Pink branch, owned by L Brands, is starting to decline. The August sales of Victoria's Secret's same-store dropped by 5% compared to the previous year.

Randal Konik, who led a team of analysts, has warned that Victoria's Secret was taking a scary step in promoting its "buy 2 get 1 free" Body By Victoria bras offer and selling $3 panties for its Pink members. "Victoria's Secret brand is broken and Pink is now breaking," Konik stated.

Victoria's Secret's owner L Brands has also made the announcement that Denise Landman, CEO of Victoria's Secret Pink brand, will retire. He will be replaced by a leader from the Bath & Body Works [BBW] franchise.

Konik said, “BBW continues to be strong, with favorable customer acceptance to new product driving [comparable sales] up 15%, well ahead of the consensus of 5%. However, we note that the business is cyclical, and we think it will eventually moderate."

"With little value left for VS, Pink in the early innings of what we believe will be a long decline, and BBW, while strong, not capable of supporting the entire business, we see cash flow prospects declining and believe shares can move much lower," Konik further added.

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