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The hour-long “Victoria’s Secret Fashion Show” is just one part of a month-long marketing effort that is strategically timed for the holiday season and uses supermodels and social media to target key customers.
“It’s an event that happens once a year and one of those that you want to talk about,” said Marshal Cohen, chief industry analyst at The NPD Group. “This is a highly social, digital event that will reverberate for weeks to come.”
“The Victoria’s Secret Fashion Show,” the 20th for the brand, happened on Nov. 10, but only aired on Tuesday night on CBS.
L Brands Inc. LB, -0.63% is the parent company of Victoria’s Secret and Bath & Body Works, among other brands. November same-store sales increased 6% at Victoria’s Secret, according to the monthly sales report announced Dec. 3. Sales at L Brands for the four weeks ending Nov. 28 were $1.2 billion, an 8% increase year-over-year.
Sales at Victoria’s Secret were driven by core lingerie and Pink, which the company describes as an aspirational lifestyle brand geared toward the college women and campus life.
“It’s not just girls in their underwear,” said Sam Aldenton, associate digital director at WGSN, a fashion and consumer trend forecasting and analysis company. Many of the models in the show have tens of thousands, if not millions, of followers on Twitter and Instagram. And many of their fans are young women who, Aldenton said, are “coming into their buying power” and will buy what they see these models wearing on their social media feeds.
“They see these models on Instagram and say, ‘I want to buy that bra or swimwear they’re wearing,’” said Aldenton. And with pricing as low as five pairs of underwear for less than $30, “it’s an attainable category.”
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“[Fans] saw all the preparation, the items dribbling out from the models up to this point,” Aldenton told MarketWatch. “It’s the biggest hype machine we’re seeing from any brand. I don’t think anyone does it as well as Victoria’s Secret.”
And it broadcasts at the heart of the holiday shopping season.
“They create this show for the inflection point when their customer is going to be shopping,” said Aldenton.
The brand’s efforts are making it a standout to analysts as well. Cantor Fitzgerald raised L Brands’ price target to $99 from $96, it said in a note published on Friday, based on November sales and the strong start to the holiday season.
“VS was the busiest brand we saw in our Thanksgiving/Black Friday store visits, and we did not see an aggressive uptick in promotions (buy one bra get one 50% off, free tote with $65 purchase),” the bank wrote.
Cantor Fitzgerald gives L Brands stock a hold rating.
The show was called a “major marketing catalyst” in a note Cowen & Company published on Thursday, which said Victoria’s Secret is in a “leadership position” with a “lack of a major number two competitor” and “innate loyalty in intimate apparel.”
Cowen gives L Brands shares an outperform rating with a price target of $110.
Despite the declining mall traffic that American malls have experienced, Victoria’s Secret has been able to overcome that hurdle.
See also: What the death of the American mall means for investors
“Recognizing the volatility of other mall-based retailers, investors have now placed meaningful premiums on the multiples of consistent brands,” said Simeon Siegel, senior retail analyst at Nomura. “Investors have recognized that and rewarded the company for it.”
“The Victoria’s Secret Fashion Show” is what NPD’s Cohen calls “a perfect storm.”
“It has the guy factor, the sex factor, the passionate category of intimates factor, the extravaganza of it,” he said. “You can’t run away from something that has this level of connectivity.”
