The Victoria’s Secret CEO insisted that an explosive Hulu documentary in July that chronicled the lingerie giant’s ties to dead pedophile Jeffrey Epstein was a “non-event” – instead he blamed the retailer’s dreary quarter on the economy.
Victoria’s Secret was poised for a double whammy when the documentary “Victoria’s Secret: Angels and Demons” was released on Hulu on July 14, illustrating the close relationship between Epstein and billionaire Les Wexner, the former head of Victoria’s Secret and its parent company, L Brands.
The documentary claims that while Epstein was attracted to Wexner for his money and access to Victoria’s Secret supermodels, some of whom he allegedly abused, Wexner considered Epstein to be sophisticated and glamorous. According to the documentary, Epstein also provided financial and legal advice regarding Wexner’s prenuptial agreement.
The documentary even suggests that the men had a sexual relationship, which Wexner “vehemently denied” in a statement through his lawyer.
“We were extremely prepared,” Chief Executive Officer Martin Waters told analysts on a conference call Thursday, adding that the film turned out to be a “non-event” because it has a “very low audience.”
“After years of vilifying the brand,” Waters added, “99% of what we do today is brand polishing. We are on our way, we still have a lot to do”, but “we are on the right track”.
The company said late Wednesday that its sales fell 6% to $1.5 billion in the second quarter ended July 30, while like-for-like sales fell 8% year-over-year. He also cut his forecast for the year, estimating that sales would decline in the mid-to-high single digit range.
Management said the lingerie maker, which went independent a year ago from a spin-off from L Brands and sister retailer Bath & Body Works, suffered the same fate this summer as other mall retailers.
“Our [customer] The traffic slowdown trends are broadly in line with what the mall or other retailers have seen,” CFO Tim Johnson said during a call with analysts on Thursday.
Victoria’s Secret has revamped its brand image over the past couple of years, ditching sexualized ads and adding more diverse models, including plus size women, to its marketing, but consumers are less concerned about such factors in a struggling economy.
“Low-income consumers have to fight for every dollar, and basically our consumer is a middle- and low-income consumer,” Waters said during an earnings call. “We were very much influenced by time.”
Both Macy’s and Nordstrom cut their full-year forecasts this month, citing consumer spending concerns, while mass discounter Walmart said its sales have only surged during the economic downturn as more shoppers, including families with higher incomes, looking for great deals. He also reported that clothing sales have fallen.
The company’s shares rose nearly 5% to $40.