- 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 Wednesday, same-store sales were down by 5% 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 12 consecutive quarters of same-store sales growth; its same-store sales were up 27% in the fiscal year 2017 (first-quarter earnings of 2018 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 in March.
Here are some of the hottest new companies and collections that could pose a threat to Victoria’s Secret:
American Eagle’s Aerie
American 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 12 consecutive quarters of positive same-store sales growth.
Love by GapBody
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 at the time.
- Facebook/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.
New York-based online underwear startup Lively was founded by Michelle Cordeiro Grant, 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.
So far, the company has raised $8.5 million in funding from investors including GGV Capital, a growth fund that has also backed Slack and Airbnb.
The Lively brand was built on social media. New products were created based on feedback from its Instagram and Facebook followers.
Cordeiro Grant refers to these people as her “community,” and the brand is built around their opinions.
“Les Wexner [longtime CEO of L Brands, the parent company of Victoria’s Secret] was really amazing at teaching us the power of brand storytelling and cohesiveness,” Cordeiro Grant said. “What I thought was lacking was the idea of community.”
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.
J.Crew is also looking to cash in on the lingerie market. In February, the retailer launched its first underwear collection for both men and women.
The women’s lingerie costs between $12.50 and $38 for elegant variations of the bralette and underwear.
The store is making a concerted effort to grow its business and bring back customers after reporting weak sales in recent years. Same-store sales have been down at J.Crew for the past three years, dropping by 10% in 2017, following an 8% and 10% decrease in the years prior.
But in 2014, the company launched its own private-label collection, headed by former Victoria’s Secret designer Rania Abu-Eid. It costs between $19 for a thong and $149 for a bodysuit.
The company now has five stores in the US.
Amazon’s Iris & Lilly — coming soon to the US
- Amazon UK
Amazon is already investing heavily in apparel. In 2017, The Wall Street Journal reported that the retail behemoth would be bringing its UK private-label lingerie brand, Iris & Lilly, to the US imminently. It has yet to launch in the US.