Martin Waters is bringing Victoria’s Secret to the big dance on Wall Street with an especially tricky two-step. 

The chief executive officer reintroduced the brand to investors and analysts with a presentation on Monday, setting up the retailer’s Aug. 3 spin off, when Victoria’s Secret and Bath & Body Works will officially be established as independent companies, which will effectively break up what had been L Brands Inc.

CEOs pitching their companies to investors usually lead with growth — and Waters certainly pointed to all kinds of opportunities to expand both mind share and market share — but he started with something of a corporate mea culpa, addressing head-on the formerly sex-obsessed brand’s missteps. 

He made his debut with an admission: “We got it wrong.

“We lost relevance with the modern woman,” Waters said. “And she told us very clearly to change our focus from how people look to how people feel, from being about what he wants to being about what she wants and to support her in her narrative, in whatever way that she chooses.”

Victoria’s Secret has already been migrating away from its previous image, grounding the Angels and their glitzy runway extravaganza and replacing them with the VS Collective, a group of women of varying body sizes and backgrounds meant to connect anew with the consumer. 

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“To win her back, we’ll celebrate and inspire and we’ll support her desire to show up however it is that she chooses,” Waters said.

All together, it’s a major change for Victoria’s Secret, which ranks as the largest U.S. intimates brand with a roughly 20 percent share of the market.  

 “We’ve redefined the vision and the purpose and the mission of the company,” Waters said. “And our vision is pretty ambitious. It is to be the world’s leading advocate for women. And that’s about creating lifelong relationships with women reflecting their journey and their community and creating positive change for the world through the power of our platform and through our products and our services.”

It is a mission that resonates very much with fashion in 2021 — every brand has a purpose today — but it is a new look on Victoria’s Secret, which is seeking a fresh start after a particularly rocky stretch. (The company’s new thinking also expands past branding to a fresh take on stores, including a growing number of tests of off-mall locations.)

Waters described the 2009 to 2015 period as the brand’s “growth years,” but then “rather politely, I call the period 2016 to 2019, our execution missteps.”

He said the brand lost “closeness to the customer,” underinvested in digital, made a series of “destabilizing” management changes and then did not reposition the brand, showing up “in a way that was tone deaf and culturally inappropriate.”

While names weren’t named, this is a period that began when the company’s founder, retail legend Leslie Wexner, stepped into and sought to rejuvenate the brand. But Wexner’s take on the business, which over the decades he built into a powerhouse, has now given way to a new vision and for a new world.  

Victoria’s Secret, though, is moving from one world to the next with a host of advantages that leave it — no matter what damage has been done — a force to be reckoned with in the intimates space. 

As of the end of the first quarter, the soon to be single Victoria’s Secret & Co. logged annual sales of $6.1 billion — 43 percent of that from North American e-commerce — with earnings before interest, taxes, depreciation and amortization of $919 million. 

The company, which also includes Pink and a big beauty business, counts 700 million web visits annually, 77 million Instagram followers, 27 million active customers in North America and a global presence. 

While the company’s store base peaked at 1,143 in 2016 and stands at 867 doors today, Waters noted the stores each turn a $900,000 profit and have 3.8 years left on their leases, on average, leaving room to adjust. 

And some quick moves might be needed.

“There is downward pressure from about 150 vulnerable malls where we currently make money, and we don’t want those malls to close,” Waters said. “But if the mall is closed, obviously, we close, and we expect that those malls will continue to be vulnerable for about three years.”

But in general, as consumers come off a year-and-a-half of social distancing and go back to Victoria’s Secret, they’ll see stores that are brighter and set up to highlight the product. 

This fall, the company is experimenting with three existing stores that will all be rebuilt from the ground up. Of those stores, one will be in an off-mall location. And next year, when the company plans to test 10 new stores, most of them will be in off-mall locations, including value centers. “We don’t need to show as a clearance store, but we can take advantage of the traffic that’s in those clearance and off-mall locations,” the CEO said. 

Clearly, it’s a new day for Victoria’s Secret  — in both branding and operations.



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