The struggling Victoria’s Secret brand has been quietly shutting down some of its stores in Canada.
The latest is the lingerie and bra retailer’s location in CF Market Mall in Calgary after it shut down operations in CF Sherway Gardens in Toronto, CF Richmond Centre near Vancouver, St. Vital Centre in Winnipeg, CF Markville near Toronto, White Oaks Mall in London and CF Rideau Centre in Ottawa. A ‘Pink’ by Victoria’s Secret also recently closed at Mapleview Centre in Burlington Ontario. Several more closures are planned.
“In the not too distant past it was one of the most anticipated store openings in Calgary when Victoria’s Secret opened at CF Market Mall. The intimate apparel trade is very competitive in the Calgary market with over 30 outlets ranging from chain retailers such as La Senza to 16 independents across the city. Not to mention the lingerie departments in the department stores such as Hudson Bay, Nordstrom, and Holt Renfrew,” said Michael Kehoe, broker of Fairfield Commercial Real Estate in Calgary, who specializes in the retail market.
“Calgary is well served in this fashion segment and the departure of a category dominant player like Victoria’s Secret in one of the city’s major malls will not go unnoticed. The 13,000-square foot Victoria’s Secret retail outlet and their junior concept PINK, a 4,000-square-foot store at CF Chinook Centre are serious players at Calgary’s dominant shopping centre. Even with the CF Market Mall Victoria’s Secret store closure, Alberta has more intimate apparel retail space per capita than any other Canadian province. Alberta is a hot spot for intimate apparel retailing with just under 300,000 square feet of lingerie focused retail space spread over 91 stores ranging from local independents to national and international chains not including the lingerie departments in the major department stores.”
Recently, it was announced that Victoria’s Secret will have a new owner as L Brands was selling the high-profile retailer to private equity firm Sycamore Partners, who are buying 55 per cent interest for about US$525 million.
The lingerie brand has also experienced bad publicity as Les Wexner, who founded the parent company, has been linked in the media with the late financier Jeffrey Epstein, who was accused of sex-trafficking.
In Calgary, Victoria’s Secret/PINK opened in CF Chinook Centre on May 5, 2011 while the retailer opened in CF Market Mall on October 17, 2013.
Darryl Schmidt, Vice President, Retail Leasing in the Western Portfolio Office of mall operator Cadillac Fairview, said the closure of the Victoria’s Secret store in CF Market Mall was not surprising.
“Really for the last 24 to 28 months we’ve seen deep double-digit comp sales declines in Victoria’s Secret across the entire portfolio from British Columbia all the way to the Maritimes. As we got closer to some of the expirees it was becoming apparent that there was going to be a disconnect between their rental expectations and our rental expectations given their declining sales performance,” said Schmidt, adding that he expects a few more closures in the portfolio.
“Really we’ve been seeing this storm coming for a while. Some of it speaks to the fact that when we did that first tranche of business they thought that Victoria’s Secret was going to be 10 to 15 stores in Canada then it was phenomenally successful and they wound up opening 40 plus stores. I think they cannibalized some of their own market share.
“With the announced bankruptcies since January 1, 2020 of Carlton Cards/Papyrus, Thomas Sabo, Things Engraved, Bench, Links of London, La Senza depending on how the Chapter 7 Petition goes, and Pier 1, suffice it to say it's been a very rough start to the year.”
The CF Market Mall Victoria’s Secret location, which was about 14,200 square feet, closed at the end of January.
“It’s a large block. So we’re not inclined to lease it in one chunk. We’re probably going to demise it to two units. We’ve got one group that we’re quite far down the road with the lease for half the space,” said Schmidt. “It’s a known commodity and I think it will be a good addition to the shopping centre.”
Rob Walker, Senior Vice President/Partner with Colliers International, who specializes in retail, said Victoria’s Secret has closed about 55 stores in North America but it’s less than five per cent of its total stores.
“You’re never going to bat 1,000,” he said. “It’s just the whole course of business. This market has slowed. There’s no doubt about it. The costs have escalated, and those property taxes are having a devastating effect on the retail industry. So we’ve had a reduction of sales and increasing costs. It results in store closures. It’s as simple as that,” said Walker.
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“They’ve been in a freefall from a sales perspective and part of the reason for that is some of the controversy they’ve been embroiled in and one of them is their CEO appears to have been good friends or associated with Jeffrey Epstein. So that was a problem. Recently as well they’ve been in the news because one of their senior executives had a number of women come forward alleging that he conducted himself inappropriately with a number of staff over the years,” said Winder.
He added that Victoria’s Secret’s positioning as super sexy has faded. Beauty was defined as women being six-foot-one, white, 100 pounds. But Winder said society has changed and other brands have embraced inclusivity.
“Beauty now is any sexual orientation, any colour, any size, any weight, anything. Other brands have embraced this type of positioning whereas Victoria’s Secret has taken a long time to do so.
“It’s been kind of like death by a thousand cuts for these guys.”