Victoria's Secret ($NYSE:LB) had long been a staple in shopping malls and the go-to destination for mid-shelf lingerie. But recent years have seen the company in decline, with a troubled brand image, a disgraced CEO, falling market capitalization, and billions of dollars in debt.

The coup de grâce came earlier this month amidst sexual misconduct allegations. Today, the Wall Street Journal reported that Victoria’s Secret will soon go private at a $1.1 billion valuation. L Brands is selling the company to private-equity firm Sycamore Partners. 

Sycamore Partners will acquire 55% of the lingerie giant, while L Brands keeps a 45% stake, including the brand’s Pink subsidiary. Leslie Wexner is stepping down as CEO and chairman but will remain on the board. But it’ll take more than hiding some skeletons to improve Victoria’s Secret’s reputation.

The brand’s Facebook mentions hit a peak in 2018 at 195,000 and has been fluctuating downward ever since. Today, the Talking About count is at 98,000.

Today’s consumers are increasingly vigilant about unethical corporate practices, more willing to call out and boycott problematic companies. They will more likely support brands that incorporate inclusivity into their messaging. Lingerie retailers like American Eagle’s Aerie ($NYSE:AEO), which promotes body positivity and offers a wide range of sizes, fare well in this new environment.

Over the past two years, Aerie’s Apple Store ratings have soared above Victoria’s Secret. Aerie had 197% fewer ratings than Victoria’s Secret in 2018, but that number has grown from 12,100 to 405,000. Victoria’s Secret is currently at 165,000 ratings.

Sycamore could very well encourage Victoria’s Secret to cash in on “woke” marketing with a new team of executives. The firm could also redirect Victoria’s Secret’s focus toward leisurewear or sports. They could just as likely burn it to the ground by separating and selling what remains of Victoria’s Secret.

About the Data:

Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales. 

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