Rihanna Delivers Victoria’s Secret Its Final Business Blow

Written by CultureBanx
Rihanna leveraged her social media power to quickly grow her online-native lingerie brand to an annual revenue estimated at $150 million. In this May 10, 2018 file photo, singer and fashion icon Rihanna appears at an event to promote her new lingerie brand in New York. Image: AP Photo/John Carucci, File
  • Victoria’s Secret was sold to a private equity firm at a dismal $1.1B valuation
  • Savage X Fenty brings in annual revenue estimated at $150M

Savage X Fenty has been gaining market share on Victoria’s Secret to the point where its parent company L Brands (LB +2.8 percent) has sold a controlling stake in the company, to a private-equity firm at a dismal $1.1 billion valuation. They had been suffering from declining sales while the lingerie brand belonging to Rihanna is skyrocketing, causing the legacy company to be spun off into a fully private company. In an age of diversity, the industry has seen a significant shift, with Savage X Fenty poised to become a front runner in the global lingerie market that’s expected to hit $325 billion by 2025.

Why This Matters: Rihanna’s lingerie brand sits squarely at the center of business and culture in the $13.1 billion U.S. women’s underwear sector, leaving Victoria’s Secret hard-pressed to replicate this model. Last year, Victoria’s Secrets’ antiquated lingerie show of yesterday finally decided to close up shop, and Rihanna’s successful Savage x Fenty brand surely helped deal the final blow. Now the company is being sold to a private equity firm.

Victoria’s Secret reported $7.37B in sales during its fiscal 2018, so to be sold for around 15 percent of that is abysmal to say the least

The company reached a $525 million deal to sell 55 percent of the lackluster brand to Sycamore Partners. For the remaining 45 percent, L Brands will hold onto it, which includes the logo-heavy Pink chain, in efforts to calm investors fears. Shares of L Brands have been down as much as 50 percent in the past two years.

Victoria’s Secret reported $7.37 billion in sales during its fiscal 2018, so to be sold for around 15 percent of that is abysmal to say the least. Savage X Fenty’s sales are growing, and Victoria’s Secret’s sales are declining with stores that were open at least a year falling 10 percent during Q4 last year. 

With inclusivity at the heart of her lingerie brand, Rihanna has included plus models in Savage X Fenty with shades of nudes galore since its inception, setting the business up for success. The brand received $50 million in new funding, bringing total investment in the company to $70 million since its launch in May 2018. The singer has leveraged her social media power to quickly grow the online-native brand to an annual revenue estimated at $150 million.

Buy These 10 Moguldom Films For ONLY $9.99!

What’s Next: All hope isn’t lost for Victoria’s Secret since it’s still the biggest lingerie brand in the U.S. They command a market share of 24 percent, albeit that’s down from about 32 percent in 2013, according to Coresight Research. L Brands has about $5.5 billion in net debt, so the $1.1 billion from selling Victoria’s Secret will knock that down by nearly 20 percent.  

CBx Vibe:Lingerie” Lizzo

This article was written by the Culturebanx Team and published by CultureBanx. It is reposted here with permission. Read the original.