Bloomberg Businessweek Asia Edition - 05 August 2019

◼ BUSINESS Bloomberg Businessweek August 5, 2019

16

● ByacquiringAvon,Brazil’sNaturaplanstoturn

itsarmyofdirectsalespeopleintoonlineinfluencers

Sellingthe Rainforest

Door-to-Door

THEBOTTOMLINE Victoria’sSecretlongprosperedby

promotingitssexylingerie.Butchangingnormsaboutwomen

andbeautycouldputthatgrowthatrisk.

may be a result of the 2016 departure of Victoria’s

Secret’s longtime CEO, Sharen Jester Turney,who’d

guided the brand for a decade while managingto

convince many consumers that its celebrationof

the feminine body was a form of femaleempow-

erment. Turney left because she didn’t agreewith

the direction Wexner wanted to take the business,

according to a person familiar with theirconver-

sations. “With her gone, the men really justtook

over,” says one former executive. “And thesewere

men who had one ideal of women, andit’snot

based in reality.”

Jan Singer, who replaced Turney, left lastyear

soon after Razek made comments some plus-size

modelsandthetransgendercommunityfound

demeaning.Singerwasreplacedbya man,leaving

L Brandswithonlytwowomenamongthe 10 listed

executiveofficersandbrandleaders.Attheurgingof

activistinvestorBaringtonCapitalGroup,LBrands

this spring added two more women to its board.

The failure to embrace changing normsabout

womenandbeautymayalreadybehavingan

impactonVictoria’sSecret’sresults.Afterrising

steadilysince2010,salesfellto$7.4billioninfis-

cal 2017—the first drop in seven years—andedged

slightly lower again last year. Sales at storesopen

formorethan 12 months,a closelywatchedmet-

ricinretailing,alsoslippedin2018,withoperating

incomeattheunittumbling45%,to$512.4million.

Those poor results have led L Brands totighten

its purse strings, resulting in the shutteringof

dozens of underperforming locations. LBrands

announced in February plans to close about 53

Victoria’s Secrets in North America this year,more

than three times the 15 it’s historically closedinan

averageyear.“Giventhedeclineinperformanceat

Victoria’sSecret,wehavesubstantiallypulledback

oncapitalinvestmentinthatbusiness,”LBrands

executives said in prepared commentaryinMay

after reporting a further 5% drop in same-store

sales in 2019’s first quarter.

Another notablechange:InMay,Victoria’s

Secretpulleditsfashionshowfromnetworktele-

visionafter 23 years.Ratingsbottomedoutin2018,

withonly3.3millionviewers,downfromthepre-

viousall-timelowof 5 million the year prior.The

annual show is expected to move to streaming.

There may be limits to just how much Victoria’s

Secret can change its messaging. AmericanEagle

Outfitters Inc.’s rival Aerie line has found abaseof

passionatecustomerswhoareyoungerandmore

diverseandarecallingforbrandstohavebody-

inclusive messages. That’s helped Aerie log 18 con-

secutive quarters of double-digit same-storesales.

One advantage is that Aerie doesn’t have 40 years

ofbranding toovercome.“There’sbeen very

interestinggrowthinconsumersembracingthis

moreholisticbody-image view, but it’s probably too

far of a step away from what the DNA of Victoria’s

Secret is,” says Alex Arnold, a managing direc-

toroftheconsumerpracticeatinvestmentbank

OdeonCapitalGroupLLC.“Itwouldbea whole-

salerepositioningofthecompany.”�KimBhasin,

JordynHolman,SophieAlexander,andAndersMelin

On a pleasant Tuesday in May, dozens of beauty

influencers gathered at the New York Botanical

Garden in the Bronx for a vegan lunch and a panel

on sustainability in cosmetics. As they sipped pas-

sion fruit caipirinhas, the young women snapped

photos of lotions and soaps featuring exotic ingre-

dients such as murumuru and priprioca.

They’re the types of products that made host

Natura Cosmeticos SA a beauty giant in Brazil—

and that the 50-year-old company wants to bring

to the rest of the world. With its agreement in May

to buy Avon Products Inc., Natura is accelerating its

global ambitions and betting its brand of natural,

ethically sourced cosmetics will appeal to millen-

nial and Generation Z consumers who increasingly

want sustainable goods.

The company wants to attract social media

enthusiasts such as Ava Lee, a New Yorker who was

at the Bronx event. “I love that all Natura Brasil

products are clean and sustainable,” says Lee—

@glowwithava on Instagram—who often posts pho-

tos of cosmetics for her almost 24,000 followers.

“It’s hard to come by products that smell this good

and at the same time are very gentle on the skin

and don’t cause irritations.”

Natura’s $2 billion purchase of Avon—the very

companyit hadlongemulatedwithitsdoor-to-

doordirect-sellingmodel—willmakeit theworld’s

fourth-biggest cosmetics company and among the

largest focused on natural products. About 80%

“In other

markets,

you see the

movement of

beauty going

into wellness.

In Brazil it

started the

other way

around”