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Dive Brief:
- Hillary Super is Victoria Secret & Co.’s new CEO, the company announced Wednesday. Super will take over on Sept. 9. She will join the company and the board after serving as CEO of the Savage x Fenty intimates and accessories brand since last June.
- CEO Martin Waters, who held the role since 2021, was terminated from the position effective Tuesday, according to a U.S. Securities and Exchange Commission filing. He also resigned from the board, which was “not the result of any dispute or disagreement with the company,” according to the filing. He will stay with the company through Aug. 31 to support the leadership transition. Timothy Johnson, the company’s chief financial and administrative officer, will serve as interim CEO through Sept. 8.
- Victoria’s Secret also reported preliminary second quarter results Wednesday. Net sales are expected to dip 1% to 2%, while adjusted operating income is forecast to reach $57 to $62 million. The company’s previous guidance was for a sales decline of 1% to 3% and adjusted operating income of $30 million to $45 million.
Dive Insight:
Victoria's Secret is bringing on board the leader of Savage x Fenty, a competing retailer. Analysts welcomed the change after the company posted several quarters of soft performance.
“We think this thesis change is likely to be welcomed by the Street, given Savage was one of the lingerie brands taking share from [Victoria’s Secret] for the last couple of years as they struggled against the rise of e-commerce competitors and a deteriorating brand reputation,” Wells Fargo analysts led by Ike Boruchow said in a Wednesday note.
During his time as CEO, Waters pivoted toward a new marketing and merchandising strategy. He dismissed concerns that the changes were too drastic, and some analysts warned that the product assortment lacked consistency. The turnaround efforts included debuting a revamped loyalty program last year. As of June, it had 30 million members who drove nearly 80% of sales on a weekly basis, Waters said. The company also announced the relaunch of its Pink brand last year.
Super will lead a company that reported $1.4 billion in net sales in Q1 — a 3.4% year over decline — with about 30,000 employees and 1,370 stores in nearly 70 countries.
Before joining Savage x Fenty, Super led the turnaround of Anthropologie’s women’s apparel and accessories business. She’s also held various leadership roles at Guess, Ann Taylor Inc., American Eagle Outfitters and Gap Inc. In her new role as CEO of Victoria’s Secret, Super’s compensation package includes a base salary of $1.2 million, an annual incentive bonus equal to 175% of her base salary and an additional bonus of $1 million, according to SEC documents.
Wells Fargo’s analysts also said the intimate apparel, accessories and fragrance retailer “has recently begun showing some signs of stabilization and this could be the ideal time for the baton to be handed off to the next leader, who can help the brand rebuild its reputation among consumers.”
Victoria’s Secret Board Chair Donna James echoed the analysts’ sentiments, saying Super “understands vertically integrated retail brands and has an intuitive understanding of the consumer landscape, informed by customer insights which are critical for consistently delivering in this industry and its ever-accelerating fashion and economic cycles.”
James said the company’s preliminary Q2 results indicate positive momentum. “We were encouraged by the continued sequential improvement in quarterly sales results in North America for the fourth consecutive quarter, as sales trends improved in both our stores and digital channels,” James said.
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Nate Delesline III, Khareem Sudlow
