Business Insider/Mary Hanbury
- Victoria's Secret has been accused of failing to appeal to female shoppers in recent years, with some customers complaining on Facebook that its ads, which feature scantily dressed models, are targeted more towards men than women.
- Meanwhile, rival brand Aerie has doubled down on its efforts to promote female empowerment and is gaining market share.
- We've compiled a list of up-and-coming lingerie brands that could pose a threat to Victoria's Secret.
Lingerie giant Victoria's Secret has been accused of failing to appeal to its female shoppers with racy ad campaigns, relatively steep pricing, and rail-thin models.
In its parent company's most recent earnings report, released last Wednesday, same-store sales were down by 6% at Victoria's Secret stores.
Increasingly, brands such as American Eagle's body-positive underwear store, Aerie, have swooped in and taken market share away from Victoria's Secret. Aerie has seen 11 consecutive quarters of same-store sales growth; its same-store sales are up 23% so far in 2017 (fourth-quarter results have not yet been reported) and this is becoming a major concern for its main rival.
"Over the past few years, we believe the competitive landscape in lingerie (in constructed, un-constructed, and Sport) has evolved. In addition to players such as Aerie (AEO) who are offering a very clear brand proposition, new digitally-native entrants are entering the arena," Cowen analyst Oliver Chen wrote in a note to investors Thursday.
Here are some of the hottest new companies and collections that could pose a threat to Victoria's Secret:
American Eagle's AerieFacebook/AerieAmerican Eagle's underwear brand, Aerie, has become one of the company's biggest sweet spots. The underwear collection, which includes a limited selection of apparel and swimwear, is targeted at 15- to 25-year-olds and covers a breadth of sizes from XXS to XXL.
Aerie famously doesn't Photoshop any of the images in its ads. In 2014, it swapped its airbrushed ads for unretouched photos and launched a body-positive campaign known as #AerieReal. This seems to be resonating well with customers as it has seen 11 consecutive quarters of positive same-store sales growth.
Love by GapBodyFacebook/Gap
Gap's latest underwear collection, Love, is focused on "comfortable basics."
It's too early to judge how successful it is, as it just launched in February, but its ad campaign has been well-received online. One photo that showed a woman breastfeeding her baby went viral last week after being praised on Instagram.
"I have never shopped at Gap, but I will be purchasing something tonight! This is amazing!" one Instagram commenter wrote.
True&CoFacebook/True & Co
Online-only store True&Co, which launched in 2012, aims to make shopping for bras more straightforward with a quiz that asks shoppers a series of questions about their shape, how their bra currently fits, and what preferences they have.
From there, the store emails customers a selection of recommended bras, which they can try on at home and then return any that they don't like.
The company was acquired in 2017 by PVH Corp., the parent company of brands such as Calvin Klein and Tommy Hilfiger, for an undisclosed amount.
LivelyFacebook/Lively
New York-based online underwear startup Lively was founded by a former senior merchant for bras at Victoria's Secret. The brand prides itself on being a bridge between athletic wear and lingerie, which it has coined "leisurée." Bras cost $35 and come in a mix of styles including bralettes, t-shirt bras, push-up bras, and plunge bras. "I admire Victoria's Secret as a business, but I stopped relating to the fantasy and the push-ups and the armor, it was too much for me," founder Michelle Cordeiro Grant told The New York Times in 2016, shortly after she launched Lively. "I wanted to create something more authentic for the modern woman, where she doesn't have to choose between style and comfort. Victoria's Secret is the mind-set of 'How do I feel when a man looks at me?' versus 'How do I look when I'm feeling confident, comfortable and ready to take on the day?'" she said. The company announced it had raised $3 million in funding last Wednesday, which is reportedly being invested into opening stores. The company recently trialed a selection of pop-ups in the US.
ThirdLoveFacebook/ThirdLove
Founded in 2013 by a former Google employee and her husband, ThirdLove is known for selling half-sizing in bras.
The process works in a similar way to True&Co., as customers complete an online quiz to find their perfect bra shape. Because of this, the company says it now has over 75 million data points about breast shapes, bra sizes, and the most common fit issues that women face.
The startup has raised over $13 million in venture funding.
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