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Victoria’s Secret is still trying to sell sexy. And it isn’t working

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L Brands CEO Les Wexner and his team seem to have somewhat of a plan in place for the upcoming year to generate some excitement around the Victoria’s Secret brand again, but the details remain murky.

Come this spring, Victoria’s Secret will be back in the swim business, according to CFO Stuart Burgdoerfer. That’s a category that cost the company $500 million in annual sales when it pulled out of in 2016. Burgdoerfer told analysts during a conference call in November that the company will also move back into some of the other businesses it’s exited in the past, but hasn’t yet expanded further on those plans.

Victoria’s Secret is, meanwhile, saying it will focus on pushing more its best-selling merchandise, like a $20 T-shirt bra. It has a beauty business that’s managed to deliver positive same-store sales growth for six quarters now. And with Pink, an off-shoot that caters to college-aged customers, it’s promised to use less “bling.”

Back on Wall Street, the future of Victoria’s Secret’s parent company, L Brands, is still being debated.

L Brands’ stock tumbled near 60 percent in 2018, making it one of the worst performers on the S&P 500. Shares were worth $100 roughly three years ago but today trade under $30. The stock is up about 3 percent so far this year, though.

One analyst recently called it a comeback story. Wells Fargo’s Ike Boruchow has deemed L Brands one of his top picks in 2019. He’s hopeful the company will finally close some of its Victoria’s Secret shops, as he argues there are too many, and this will help it focus on profitable assets. Victoria’s Secret has already hinted that it could shut some locations. It has more than 1,100 (including Pink) in North America today.

Jefferies analyst Randal Konik, however, says the company is struggling with much “deeper” issues than some might realize. Similar to UBS’ Sole, he says shoppers “aren’t responding” even to deep discounts. Konik thinks L Brands’ shares could still fall by more than 50 percent. He further thinks the Pink brand is “at the precipice of a major decline.”

With roughly $3 billion in annual sales, the Pink brand could fall to $2 billion “based on our history seeing what happens to brands that are fads,” Konik said. Pink, which also sells athleisure gear like fleece hoodies and sports bras, was once considered the growth engine for Victoria’s Secret, but momentum has since stalled.

L Brands is set to report fourth-quarter earnings on Feb. 28.

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