Victoria's Secret Stores is not hush-hush, but it is unmentionable(s). The largest subsidiary of L Brands (almost 50% of sales) is also North America's #1 specialty retailer of women's intimate apparel, operating about 1,045 mostly mall-based Victoria's Secret and Victoria's Secret Pink shops throughout the US, Canada, and now the UK. Bras, panties, hosiery, swimwear, shoes, and more are sold under the Victoria's Secret brand and grouped in collections such as Angels and Very Sexy. Many Victoria's Secret lingerie stores also sell beauty products. The chain's youth-oriented PINK brand targets teens and younger women with less-racy bras and panties, as well as sweats and hoodies and beauty products.
Victoria's Secret Stores operates about 1,020 locations in the US, about 25 in Canada, and two shops in London. Beyond North America, more than 100 Victoria's Secret Beauty and Accessories Stores (formerly Victoria's Secret Travel and Tourism Stores) are operated by partners, primarily at airports and tourist destinations.
Victoria's Secret Stores is a top performer among L Brands' retail businesses. In fiscal 2013 (ended January) sales increased by 9% versus the prior year, to nearly $5 billion. Same-store sales rose 7%. Sales increased across most merchandise categories including PINK, core lingerie, swimwear, and beauty products. Operating income increased by 10% over the same period. While its US store count has decreased by nine locations over the past two years, sales per average selling square foot increased 24%, as the remaining stores became more productive. The chain's ongoing expansion in Canada and the growing popularity of the PINK brand among younger women have also helped to boost sales.
The UK and Canada are growth markets for Victoria's Secret Stores. In 2012, the retailer opened a flagship Victoria's Secret store on New Bond Street in London, as well as a mall-based store. Plans called for three more Victoria's Secret shops in the UK in 2013. The chain is also continuing its expansion in Canada with eight new stores slated to open there in 2013. Other channels for growth include the Victoria's Secret Beauty and Accessories Stores. After adding 51 Victoria's Secret Beauty and Accessories Stores in fiscal 2013 (ended January) another 70 to 100 shops are planned for fiscal 2014.
Parent L Brands (formerly Limited Brands) kicked off its international expansion with the purchase of the La Senza chain in Canada in 2007. While the entry of Victoria's Secret Stores into Canada has the potential to siphon off sales from La Senza stores, the two chains cater to slightly different markets, with Victoria's Secret racier merchandise priced a bit higher the La Senza's. (Also, La Senza was a disappointment for L Brands, posting sales declines in 2013 and previous years.) The youth-oriented PINK brand (launched 2004) has established itself as a successful feeder brand for Victoria's Secret. Its aim is to capture teen and college-age female customers in the hope that when they mature they'll move on to the sexier styles offered by its big sister brand. PINK is sold in freestanding stores as well as Victoria's Secret shops. While the company doesn't break out PINK sales, the brand is meeting stiff competition from American Eagle's Aerie brand and Gilly Hicks by Abercrombie & Fitch. Both also target the youth market.
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