Blumeyer Investment Partners Daily Observations
How Can L. Brands Stop Target’s Pursuit to Take Market Share? Here’s How
Target (TGT) recently opened their new product line, with emphasis on appealing to their consumers on underwear and pajamas. This could certainly hurt annual revenues for L. Brands in 2019, especially after the company’s stock has already suffered a 250% decline in the last year. LB is in trouble, due to the fact that they show declining gross profit margins, a negative ROA, and a decrease in their capital structure leverage.
In 2018, Victoria Secret tried to appeal to their consumers by selling more sportswear, but reverted back to their brand of selling mostly retail that would make women “look and feel sexy”. This, however, creates a problem for Victoria Secret. Consumers usually want to enter the retail store to buy multiple products; not just walk in with only the sole focus to purchase lingerie.
This is where Target has the potential to hurt Victoria Secret. If the pricing strategy appeals enough to Target’s loyal customers, then Target will be successful in launching these brands.
Thus, it is up to LB to respond to Target’s behemoth move to try to capture LB’s market share. LB could compete more openly in malls, creating more shows and having more Influencers on Instagram and Twitter help Victoria Secret market and maximize the appeal for their products. As Instagram is burgeoning, LB has one huge advantage: their branding.
Women would rather advertise themselves and help Victoria Secret, due to the powerful and successful branding that the company has already reaped.
Another strategy Victoria Secret could begin is to research the market and position their stores that possess a higher return, but from the perspective of creating Influencing opportunities, as well as focusing on getting the men involved to buy lingerie products for their girlfriends or wives.
Although Target has the advantage, Victoria Secret has the ability to respond against the behemoth by capturing the most appealing parts of their brands, get men involved to purchase retail for their lovers, and focusing on attacking the pain points that Target has: identifying flaws in Target’s product quality while showing off their best on Instagram.
Target (TGT) recently opened their new product line, with emphasis on appealing to their consumers on underwear and pajamas. This could certainly hurt annual revenues for L. Brands in 2019, especially after the company’s stock has already suffered a 250% decline in the last year. LB is in trouble, due to the fact that they show declining gross profit margins, a negative ROA, and a decrease in their capital structure leverage.
In 2018, Victoria Secret tried to appeal to their consumers by selling more sportswear, but reverted back to their brand of selling mostly retail that would make women “look and feel sexy”. This, however, creates a problem for Victoria Secret. Consumers usually want to enter the retail store to buy multiple products; not just walk in with only the sole focus to purchase lingerie.
This is where Target has the potential to hurt Victoria Secret. If the pricing strategy appeals enough to Target’s loyal customers, then Target will be successful in launching these brands.
Thus, it is up to LB to respond to Target’s behemoth move to try to capture LB’s market share. LB could compete more openly in malls, creating more shows and having more Influencers on Instagram and Twitter help Victoria Secret market and maximize the appeal for their products. As Instagram is burgeoning, LB has one huge advantage: their branding.
Women would rather advertise themselves and help Victoria Secret, due to the powerful and successful branding that the company has already reaped.
Another strategy Victoria Secret could begin is to research the market and position their stores that possess a higher return, but from the perspective of creating Influencing opportunities, as well as focusing on getting the men involved to buy lingerie products for their girlfriends or wives.
Although Target has the advantage, Victoria Secret has the ability to respond against the behemoth by capturing the most appealing parts of their brands, get men involved to purchase retail for their lovers, and focusing on attacking the pain points that Target has: identifying flaws in Target’s product quality while showing off their best on Instagram.
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