COLUMBUS (COLUMBUS BUSINESS FIRST) — Victoria’s Secret is looking in spaces beyond traditional malls for its new stores.
The Columbus-based retailer, which is set to leave L Brands Inc. and become a standalone business next month, shared its upcoming plans during a virtual investor day earlier this week.
One of those initiatives involves exploring new real estate opportunities it hadn’t looked at in the past, including outlet malls and some off-mall sites. It’s dabbled in both before — there’s a Victoria’s Secret and Pink at Tanger Outlets in Sunbury, for example — but leadership sees new potential in the foot traffic away from the typical mall store.
CEO Martin Waters said there are 10 new test stores opening this year. Despite being located in discount-focused The ones in those outlet or value centers would not be clearance stores despite being in those discount-focused locations, he said.
Those 10 openings are in addition to three “store of the future” tests the company expects to open this fall, one of which will be in an off-mall site. Victoria’s Secret shops traditionally are heavily tied to malls — that’s where about 76% of the brand’s stores are — but Waters said company leaders see potential in off-mall. The footprint of current corporate sibling Bath & Body Works is almost half off-mall locations.
Waters said these stores not only will have a new interior design, but also significant omnichannel capabilities and a lower capital investment. Stores will be smaller than the 10,000-plus square feet of the classic Victoria’s Secret shop.
The CEO described it as a flexible environment where best sellers can be easily highlighted and slow sellers can be deemphasized. The stores also will have more breadth and depth of sizes and popular items, and mannequins of different body types.
Curious customers do not have to wait for those openings to get a peek at some of the brand’s new thinking. Most of the existing store fleet has been refreshed in the last six months to incorporate at least some of the new approach.
“Almost every store has been refreshed in some way, shape or form,” Waters said.
He described the old look as dark and heavy with not enough focus on the actual products. New stores are light, brighter and “make the product the hero.”
Victoria’s Secret had 867 stores in North America a the end of the first quarter. That is down from 1,143 in 2018, but 94% of stores are cash flow positive.
Though malls remain challenged in the wake of the pandemic, Waters said the company has completed negotiations with most of their landlords and secured meaningful rent concessions.
Digital sales have taken on increased importance as the physical footprint contracts with 44% of 2020 sales happening online, a Covid-19 pandemic-driven jump from 25% in 2019.
In other Monday news, Waters also said the company is not abandoning its fashion show and could bring it back in a new more “culturally relevant” form in the future.
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