It’s a tough time to be in the teen retail business.
Just look at the segment’s most recent quarterly performance: Earnings tumbled a whopping 130 percent on the year, as same-store sales declined 5.5 percent, according to Retail Metrics.
But as teen retailers from Abercrombie & Fitch to American Eagle shutter stores, Victoria’s Secret is putting its more youthful Pink segment on the fast track, with plans to open about 30 stores this year.
“I think it’s an exciting, fun and different-shaded brand, which leverages a lot of Victoria’s Secret’s core competencies,” said Citi analyst Oliver Chen.
After stubbing its toe in the most recent back-to-school and Christmas seasons, the Pink label has once again gained traction among consumers. In L Brands’ same-store sales report on Thursday, the college-oriented intimates and apparel line was listed as one of the drivers behind Victoria’s Secret’s 2 percent comparable-store sales growth in May.
Chen said ahead of the results that Pink’s struggles in the back half of 2013 were tied to merchandise that wasn’t quite fashion right. Since then, Victoria’s Secret has done a much better job crafting Pink’s assortment, “balancing collegiate versus fun and flirty.” He said Pink could easily double its current store count, which totals about 90 locations around the U.S.
“I think Pink’s done a good job defining themselves differently,” he said.
It doesn’t hurt that the brand’s expansion efforts come at the same time as consolidation among some of the other big names in teen retail.