Even before the pandemic, Victoria’s Secret was going through a complex moment that became more pronounced once confinement measures hit the retail sector flat.
As regards this new health crisis, the impact of the coronavirus is expected to be major for the retail sector. At least that’s how it is exposed in a recent report by GlobalData, which reveals that global spending in the retail industry falls by 3 percent during 2020, equivalent to approximately 549 billion dollars.
Between closings and low sales
In that sense, it is worth quoting data from the US Census Bureau, which warns that the category with the strongest drop in sales has been that of clothing and accessories, with a sales contraction of 78.8 percent; followed by electronics, which has had a sales contraction of 60 percent; while the home furnishings and accessories category has seen a 58 percent contraction.
Given this scenario, various retailers are projected to close more than 9 thousand 300 stores this year only in the United States.
The brand owned by L Brands contributed significantly to these figures. The brand announced in mid-May that the curtains of 250 of its stores in the United States and Canada would close permanently due to the damages suffered by the measures against the coronavirus.
The announcement was made as part of the presentation of the financial report of the parent company of Victoria’s Secret, in which it indicated that it obtained income from one thousand 650 million dollars, But in which he also recorded his third consecutive quarterly loss and the fourth drop in sales in a row, this time it was 37 percent.
Goodbye to a market
Following this announcement, Victoria’s Secret has just announced that it will emerge, at least physically, from a market that seemed like great promise.
The intimate brand of rattan has just notified that it will step back in Hong Kong and close the flagship store that has operated in that market for two years.
In a press release, the firm noted that « running a retail business in Hong Kong has become increasingly challenging, especially in the past year due to social unrest, » although he explained that he will maintain his offer in the region through his solutions. online sales.
This type of movement will begin to be more frequent among players in the retail sector, where the norm of competing for the number of stores will no longer be the premise.
Given the complex situation that the economy is experiencing in general terms, added to the context described above, there is no doubt that the sector demands a profound renovation.
With a different approach, the experience will be privileged and the market may need fewer stores, to make way for more focused and sophisticated points of sale.
The retail industry and companies that want to venture into it will have to bet on fewer stores, but more experiences. In other words, it is about optimizing service, experiences and customer service at existing points of sale to optimize expansion, rather than just dedicating efforts to expand the network. Once again it is a matter of quality rather than quantity.
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