Lessons from Victoria's Secret: How trying to please everyone cost a brand billions

A week ago, Victoria’s Secret stock soared nearly 45% after the company reported strong quarterly results and raised its full-year outlook. Investors saw signs that the retailer’s turnaround is gaining traction after it had increasingly come to be viewed as one of the clearest examples of how a market leader can lose its edge.

Alyona Nikolaeva, who independently manages portfolios of global assets, believes the Victoria’s Secret story is far more interesting than the earnings themselves: it shows what happens when a brand tries to appeal to everyone and then has to relearn how to be itself.

What mistake nearly cost Victoria’s Secret its business? Trying to please everyone: becoming more politically correct, more inclusive and, at some point, simply ceasing to be itself.

We all remember when Victoria’s Secret was one of the most recognizable brands in the world. But then the company began abandoning the very things that had made it iconic. The famous fashion shows disappeared, as did the Angels, and with them the idea of glamour and sexiness that had underpinned the brand’s strategy for decades gradually faded.

At some point, the management concluded that the market had fundamentally changed and that the company needed to become a brand that was comfortable for everyone. The problem, however, is that when a brand tries to be everything to everyone, it often ends up being relevant to no one.

Sales declined for more than two years straight. Competitors steadily took market share. Many investors came to believe that Victoria’s Secret had become a victim of its own mistakes and was unlikely to regain the ground lost.

But new CEO Hillary Super viewed the situation differently. In 2024, she posed very simple questions: what if the problem was not sexiness at all? What if the company had simply stopped understanding who it was?

That was when Victoria’s Secret began to turn around. The company renewed its focus on its core category of bras, revived the Very Sexy collection, brought back the Victoria’s Secret Fashion Show, and recently even changed its stock ticker symbol to VSXY, effectively making sexiness part of its new public strategy.

That restored an emotional connection to the brand, although many initially dismissed the effort as little more than clever marketing.

Then came the numbers. Revenue rose 15%, comparable sales increased 13%, and the bottom line came in roughly double what analysts had expected. Most importantly, the company raised its full-year guidance across several key metrics.

The stock then surged roughly 45% in a single day. Of course, it also helped that nearly a fifth of the shares had been sold short. As I have said before, investors had long been skeptical of this story.

But there is another detail that, in my view, the market is still underestimating. Sales growth came simultaneously from customers earning less than $50,000 a year and those earning more than $200,000 annually. In other words, the brand has started winning back both mainstream consumers and affluent shoppers. For a consumer business, that is a very powerful signal.

The main lesson from this story is quite simple. Brands sometimes become overly focused on listening to consultants, following trends and chasing social media approval in an effort to appeal to everyone. Yet the market is increasingly rewarding companies that have a clear understanding of who they are, whom they serve, and why customers should choose them.

A brand without character may avoid offending people. But it rarely inspires anyone to buy its products. And without strong sales, there can be no sustainable profits and, ultimately, no long-term value creation for shareholders.

It took Victoria’s Secret several years and billions of dollars of market capitalization to rediscover that simple truth.