Business Overview and Segments
This company is home to two very different stories; Victoria Secret (VS), and Bath and Body Works (BBW). Victoria Secret was an absolute powerhouse in the 2000’s and even into the 2010’s. Their lingerie was the dream of so many women; their angels captured headlines. However, their marketing approach revolved too heavily around an outdated and unrealistic image of the female body. In the 2010’s women revolted against this body image, turning towards celebration of all female bodies, not just the sickly thin. The management running Victoria’s Secret were older men whom failed to accept this new trend, keeping their angels as they always have been. This is a great example of the old-adage ‘the most important part of your business is your customers’, as VS sales have fallen off a cliff in recent years as women turn to more body-accepting lingerie brands like Fenty and Aerie. VS has been bleeding losses for 2 years and looks just about done-for. They have finally gotten rid of all the old corporates, but it could be too-little-too-late for this company. But don’t give up on L Brands just yet, there’s another side to this story – and that’s Bath and Body Works (BBW). They aren’t a thng yet in Australia, but in the US it has drawn fanatic status. BBW sells body care, hand soaps, hand sanitisers, and home fragrances. There may be many aromatic stores about, but BBW is dominating the trend in the US with niche aromas such as; Japanese Cherry Blossom, Moonlight Path, and Sun-Ripened Raspberry. BBW brings life to the deteriorating mall experience, with the sensual overload igniting obsession. If you need any proof, just check their social media, or better yet – their prices. When most physical stores are struggling to sell clothes at 50% off – they’re selling $50 candles. They’ve grown by 10% every year for the past 10 years, and every time everyone says the same thing – the slowdown is coming, but come it has not, still growing like a weed today. With so many potential growth verticals still untapped, people will pay just about anything for the smells these products make.
Brand – BBW has a brand that people will pay $50 for candles from.
Key Facts and Figures
| Risk of Bankruptcy | Moderate |
| Last Year’s Growth | 12% (Moderate) |
| ROIC (Company Quality) | N/A |
| Free Cash Flow Margin (Company Strength) | 23% (High-Very High) |