Victoria's Secret 2.0

In today’s email:

• Acquisition of the Week: Victoria Secret gobbles up DTC e-commerce player

• New Kid on the Block: Shein expands in the US

• Top Reads for your weekly enjoyment.

Victoria Secret Acquires Adore Me for $400M

The old days of over-the-top Victoria’s Secret runway shows with impossibly perfect models are long gone. While the 1990’s and 2000’s Victoria’s Secret was built on male fantasy, women have been demanding products made for them, inclusive of all shapes and body types.

Over the past several years, Victoria’s Secret has been in decline, while new, more inclusive brands, have thrived.

Enter Adore Me

The direct-to-consumer lingerie company, Adore Me, was founded in 2012 by Morgan Hermand-Waiche, a Harvard MBA (of course…). The company found its niche selling affordable and quality lingerie online and known for its “Home Try On” subscription model. The company quickly grew to join the ranks of the Inc 5000 fastest growing retailers.

While Victoria’s Secret focused on selling only to the skinny, Adore Me states that they were “the first lingerie brand to offer extended sizing across a wide range of styles & categories”. Apparently, before 2012, no one thought to sell underwear to ALL women!

No More Angels??

While Victoria Secret had dominated the lingerie market for years, their market share and influence started to decline as they fell out of touch with their consumers. Revenues fell from $7.7B in 2015 to $5.4B in 2020. The company ditched their fashion shows, got rid of their Angels, and parted ways with Les Wexner, their out-of-touch billionaire CEO and Chairman.

New look, who dis?

The old era of Victoria’s Secret was known for its big, bold, dark stores.

The new stores are softer, warmer, and a lot more pink! The old, skinny mannequins have been replaced with natural body mannequins. The layout is more open, bright, and welcoming.

Tech Enabled Underwear

Victoria's Secret is looking to ramp up their tech capabilities with the Adore Me acquisition. Adore Me brings with them 10 years of DTC digital sales and will open up channels to the millennial and Gen Z markets. With Victoria’s Secret’s continued rebranding efforts and focus on sustainability, diversity, and inclusion, Adore Me checks the boxes and will fit nicely into the portfolio.

Shein - Journey to the West

Shein, the international e-commerce fashion retailer, made the news this week, stating that they were expanding distribution facilities in the US.

In case you’ve been living in an Amazon box for the past couple years and haven’t heard of Shein, the company was founded in 2010 by Chris Xu, an SEO specialist, in China. The company is known for offering thousands of products at very low price points, with some products selling for as little as $1!

Shein experienced massive growth through social media marketing with bloggers and influencers. The biggest market is the US, which saw $10B in sales in 2020.

The company runs a lean and mean operation, with in-house designers and thousands of manufacturing partners across China, so they are able to quickly test products and capitalize on trends.

The company was recently valued at $100B, making the mysterious Chris Xu one of the world’s wealthiest.

Ultra Fast Fashion

Fast fashion has been the dominant retail trend. While Zara was one of the first fashion retailers to do away with fashion seasons and quickly turn designs into product, Shein has taken the concept to a whole new level. Together with their manufacturing partners, designers, and the quick feedback they can gather from users, they are able to test and turnaround thousands of new products on a daily basis.

Gamified Shopping

While the growth of the company has exploded with social media influencers and bloggers, Shein has also gamified shopping, rewarding users with points for daily check-ins, posting reviews, etc.

Does Shein Only Exist in the Metaverse??

While Shein has grown to a multi-billion dollar company with online sales, the company has also experimented with brick and mortar.

The company recently held a sold out pop-up event in San Francisco.

The first physical location is set to open in Tokyo in the Harajuku fashion district. The store can be used as an event space for fashion shows and to display new products. Customers will be able to scan product QR codes in-store to make purchases.

TLDR

Espirit, after disappearing in 2012, is back in the US.  

Simon Property, large mall owner, announces return of brick and mortar.

Kohl’s unveils their new smaller format concept store.

Floyd, a DTC furniture company, is testing out a physical LA showroom.

Walmart taps Popable to offer short-term store leases to small businesses within its stores