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In this edition, we share focal points from Glossy’s annual report on the distribution of luxury brands and its role in marketers’ playbooks.
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54% of luxury brands have main lines available at more accessible retailers, like Saks
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As consumers’ budgets get squeezed by rising credit card debt and the highest-end fashion brands drastically increase their prices, consumers are pulling back on their discretionary goods spending and seeking more affordable ways to indulge in luxury.
Luckily for them, more luxury rental companies are rapidly expanding to meet rising demand for more affordable high-end fashion pieces. In September, for example, 5-year-old luxury rental company Janet Mandell will open its third storefront in Manhattan. And, for its part, the growth of 7-year-old luxury rental service Switch has “exploded” since December, according to founder and president Liana Kadisha Cohn.
Luxury brands are also moving toward selling products through more accessible retailer distribution channels, according to Glossy’s 2022 Annual Report on the state and future of fashion brand distribution. Although luxury fashion brands included in this study have a smaller but more upscale overall distribution list than contemporary brands, they similarly distribute through the same top three retailers: Nordstrom, Farfetch and Saks. But, luxury fashion brands also have a higher presence at more exclusive retailers like Bergdorf Goodman, Moda Operandi and Dover Street Market.
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The increased availability of high fashion in recent years is evident with the top luxury retailer distribution channel being Nordstrom, traditionally a more accessible retailer and also the top retail partner for contemporary brands. E-commerce-focused retailer and online marketplace Farfetch also took a top position as a retailer partner for luxury brands, evidence of the importance of having an online presence for luxury fashion brands.
Key findings:
- Luxury brands have a similar distribution focus to contemporary brands with 54% of luxury brands included in the study having main lines available at the same top three retailers channels: Nordstrom, Farfetch and Saks.
- The historical sense of exclusivity that luxury brands use to draw in customers remains with a smaller and more upscale distribution list. Forty-six percent of luxury brands said they distributed through Bergdorf Goodman, while 31% said they have partnered with Moda Operandi and Dover Street Market — all exclusive retailers.
Victoria’s Secret reports earnings loss as it attempts to revamp its image with ‘Victoria’s Secret World Tour’ fall film
Victoria’s Secret & Co. reported its second quarter 2023 earnings on Wednesday. The company’s quarterly earnings were down in comparison to the same time period last year. But, thanks to a boost from international sales in China, Victoria’s Secret was able to avoid another big earnings miss similar to that of the first quarter.
After a strong fourth quarter of 2022, the company’s sales softened in North America where the apparel market continues to be volatile. Beauty has recently been the top performing business for Victoria’s Secret. The company has stayed afloat in apparel and lingerie thanks to Pink and newly acquired intimate apparel brand Adore Me, which Victoria’s Secret purchased in December 2022. Adore Me represented about 5% of Victoria’s Secret’s sales growth in the first quarter of 2023.
Glossy+ Research analyzed the impact that the rise in popularity of American Eagle’s Aerie brand has had on Victoria’s Secret in recent years. Victoria’s Secret’s lack of inclusive sizing and comfortable styles led to the brand falling out of step with consumer trends. Victoria’s Secret saw an exponential decline in its operating income and customer demand starting in 2016, when it saw a drop in its worldwide operating income of over 15%. In 2020, compared to 2019, Victoria’s Secret’s North America store sales were down 45%, or $2.3 billion, although some of that decline was assuredly pandemic related.
Victoria’s Secret also experienced a consistent downward trend in Google Search traffic within the same time period. Meanwhile, data from Aerie’s launch year of 2006 until 2021 showed that the challenger brand enjoyed a consistent upward trajectory in attention.
Since then, Victoria’s Secret has undertaken an ambitious rebrand including swapping the Victoria’s Secret Angels for a VS Collective, a group of brand advisors that includes Megan Rapinoe and Priyanka Chopra Jones. Recently, the brand also announced it will be reinventing its annual fashion show, opting for a feature-length documentary-style film to premiere in September. The new show, called the “Victoria’s Secret World Tour,” will bring together a cast of women creators, including filmmakers, musicians and artists, who will conceptualize and produce a collection to showcase alongside custom Victoria’s Secret designs.
“We are excited to introduce a completely reimagined version of the fashion show, while bringing back the very best of entertainment and fashion our customers have been asking for. We’re celebrating the iconic heritage of the brand through a new generation of artists, and we can’t wait to amplify their vision through our worldwide platform,” said Chris Rupp, chief customer officer at Victoria’s Secret & Co., in a press release.
Key findings:
- For several years, Victoria’s Secret has seen a consistent decline in its worldwide operating income. Yesterday’s release of its Q2 2023 earnings confirmed this trend continues.
- To reconstruct the brand’s public perception, a massive rebrand of the original Victoria’s Secret Fashion Show will take place this year. Instead of Angels, a VS Collective of international women creators will be featured in a documentary-style feature film focused on female empowerment.
READ MORE ABOUT AERIE’S IMPACT ON VICTORIA’S SECRET
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