July 7th, 2008

Pink Label: Victoria's Sales Secret

By Natalie Zmuda
Advertising Age

Lingerie Retailer's Sub-Brand Hits Campus to Launch Collegiate Collection

Sexy lingerie might seem recession-proof, but same-store sales at Victoria’s Secret have been languishing, down 7% in the last quarter. So it’s only natural for the chain to go to school on its thriving sub-brand, Pink.

Only 4 years old, the company’s Pink label is nearing the $1 billion barrier, which would account for roughly 17% of the retailer’s total sales last year. Now the company is taking Pink, the more flirty than sultry little sister to Victoria’s Secret to the college crowd that favors it—literally. It is introducing the Collegiate Collection of licensed T-shirts, sweats, totes and underwear for 33 universities, ranging from the University of Michigan to Texas A&M to Harvard.

The launch—easily the label’s most comprehensive yet—will be supported and promoted by a campus tour program and paid collegiate brand ambassadors. It’s designed to further entrench it with the 18-to-22-year-old set. “This grass-roots approach is a brilliant approach for them,” said Thomas Filandro, an analyst with Susquehanna Financial Group. “It’s a powerful way to connect with the core customer that they’re targeting.”

The strategy is also an effective way to cultivate customers for the flagging $5.6 billion Victoria’s Secret brand, which like Pink is owned by Limited Brands. Pink, sold at Victoria’s Secret stores, in its catalog and online, is one of the few consistent bright spots in the Victoria’s Secret empire. Six dedicated Pink stores are also open, with plans for more on the horizon.

“Pink has been a tremendous growth vehicle for them and gives them an opportunity to capture that customer at a much younger age than Victoria’s Secret was able to do previously,” Mr. Filandro said. “The earlier they can get her, the more likely it is they’ll keep her.”

Making friends
The deal will allow Pink to foster relationships with the students, schools and community, said Sara Tervo, VP-public relations and event marketing. Plans for future partnerships are clearly top of mind.

“Our strategy with this is to learn as we go and try to take what’s working and make it bigger,” Ms. Tervo said. “This is a great next step for us for this fall season. If we learn there is an opportunity to expand ... we would try to exercise that as early as spring of next year. I think it could double or triple its size in short order, but we want to be very thoughtful and strategic.”

At least one school, the University of Minnesota, is attempting to pull out of the deal, citing Victoria’s Secret’s reputation, although items are still for sale on the Pink website. Ms. Tervo said she is unaware of the status of that negotiation.

To ensure maximum visibility on campuses throughout the collection’s inaugural year, Pink is, for the first time, hiring two to three brand ambassadors at each of 15 campuses. Hundreds of résumés have been received, and the selected students will go through a training program in August to prepare them for the yearlong assignment, Ms. Tervo said.

Pinkapalooza
“It’s an opportunity for our Pink customer to give back to the brand and provide insight on strategy,” she said. “We’re hoping these brand ambassadors can help come up with some great ideas. They’re going to help inform what our strategy will be for spring.”

For the fall, the students will be charged with handling the brand’s new Recycle Your Sweats program, placing bins on campus for donations of used clothing. They’ll also be responsible for promoting the arrival of Pink’s pop-up store, a wrapped Airstream bought on eBay. The students will even embark on business trips, traveling to six college football games, where they’ll help promote various game-day events for the brand.

Pink’s official back-to-school program kicks off July 17 with Pinkapalooza at the Santa Monica Pier. The company is expecting 15,000 people to turn out for the event, which will feature competitions between rivals USC and UCLA, as well as a concert by Fall Out Boy.

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