Business Insider/Mary Hanbury
- Victoria's Secret sent out an email to customers on Tuesday informing them of 40%-off sales at its Pink brand. The subject line of the email read: "OOPS, WE MADE TOO MANY!"
- While this was likely a friendly way to reach out to customers, it is ironic given that excess inventory is one of the biggest issues plaguing retail stores currently.
- Pink was once considered to be one of Victoria's Secret's only areas of growth, but in its parent company's most recent quarterly results, the brand showed signs of slowing and has ramped up its promotions.
Victoria's Secret accidentally hinted that it was having inventory problems at its Pink brand in its latest marketing email to customers.
The email, which was sent to customers who subscribe for news alerts on new products and sales at teen brand Pink, was headed with the subject line: "OOPS, WE MADE TOO MANY!"
This was then followed by a series of photos advertising 40%-off sales on apparel and underwear at the store.
While the email subject line was likely written without serious intention, the underlying message is concerning and ultimately still true: Pink is using promotions to clear inventory and entice customers.
Pink — traditionally a bright spot while Victoria's Secret continues to struggle — has become more concerning in recent months as its constant discounting has gained the attention of analysts.
"We believe Pink is on the precipice of collapse," Jefferies analyst Randal Konik wrote in a note to investors in March, noting that the brand had ramped up its promotions.
In parent company L Brands' most recent quarterly results, Pink CEO Denise Landman hinted that the brand might be headed towards stormier waters, describing its performance as "mixed" during the quarter. This was due to "disappointing" sales in parts of its apparel collection, she said.
Our visit to a Pink store in Downtown Manhattan in April supported Konik's argument. We instantly spotted its loud, 40%-off sale signs in the store. These promotions were mostly on core products like underwear.
This was somewhat confusing as during the company's fourth-quarter earnings results for 2017, Landman said that intimates, specifically bras and panties, drove the strongest sales growth for the brand.
Overall, this level of discounting is especially concerning as Pink now accounts for nearly 40% of total sales at Victoria's Secret, according to Konik.