Victoria's Secret Owner Drops After Pink Chain's CEO Steps Down

(Bloomberg) -- L Brands Inc., the owner of Victoria's Secret, fell in late trading after the lingerie retailer cut its profit forecast and reported the head of its Pink brand will retire.

Denise Landman, chief executive officer of Pink will retire at the end of this year, the company said in a statement Wednesday. Amy Hauk, head of merchandising and product development at Bath & Body Works, will replace her. The shares fell as much as 5.8 percent to $30.60 in late trading.

The results stoked investor fears that the company's lingerie business won't improve in the second half of the year, including the all-important holiday season. Victoria's Secret is facing fierce competition from upstart and traditional retailers who cater to a more natural look and comfortable fit. Meanwhile, Chief Executive Officer Les Wexner has doubled down on maintaining the company's large, mall-based store fleet.

The retailer lowered its full-year earnings outlook. It now sees earnings per share of $2.45 to $2.70 for 2018, down from a prior projection of $2.70 to $3.

Pink had been the chain's bright spot of growth, drawing in high-school and college-aged consumers with its loungewear and underwear who would then later become Victoria's Secret shoppers. But sales appear to be slowing as discounts deepen at the nearly $3 billion brand.

The chain has helped bolster growth for Victoria's Secret for five years, according to Randal Konik, an analyst at Jefferies. He pointed to a $3 underwear deal as a sign that Pink was struggling to move inventory.

“It shows how desperate the company is to drive consumer traffic and also shows how soft demand for Pink has become,” Konik wrote in an Aug. 20 note to clients. “Pink was never promoted like this in the past and the risk ahead in our view is Pink becomes the next Juicy Couture.”

To contact the reporter on this story: Lindsey Rupp in New York at lrupp2@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Jonathan Roeder, Lisa Wolfson

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