Why is “Victoria” keeping her Pink line so “Secret”?

-American Eagle (AEOS) is aggressively going after the Pink assortment offered by Victoria’s Secret (VS). AEOS has already opened 3 dedicated “Aerie” stores, their new line of teen intimates, and sleepwear and dorm casuals with 15 more doors slated for opening in FY ’07.

-AEOS has a dedicated Aerie Internet site set up and running offering a wide assortment of teen girl intimates and casual/sleep wear at about 75% of the retail price of VS’S Pink assortment. Pink is offered in all the VS stores but does not have a dedicated site yet, integrating Pink into the Mega brand internet site. Aerie in addition to opening dedicated stores offers the line in “stand by side” stores and all American Eagle Stores.

-This demographic has been identified by Victoria’s Secret to be one of the key volume drivers of not only VS but for the entire Limited Brands. It seems to be some what of a foot fault that VS is allowing it’s self to get scooped by Aerie in this important sub brand classification. VS need to get a dedicated internet site up and running and start to differentiate the Pink sub brand from the Mega brand quickly. VS needs to spin Pink off into its own world allowing it to grow and have an identity of its own, unrelated to VS. Dedicated stores need to be scouted and opened quickly and the Pink brand should be standing alone in 18 – 24 months.

-AEOS has proven their ability to take the competitions ideas and beat them at their own game. One only needs to look at the Abercrombie/Hollister numbers, compared to the AEOS results and determine how adroit they are at exploiting the competition.

-With Limited Brands shaky performance in their Limited and Express sub brands and their potential divesture of these brands it is critical to grow Pink into its own Mega brand to replace the volume of the fore mentioned Limited sub brands.

-Aerie is an immediate threat to VS and needs to be addressed promptly if not instantly. Aerie and Pink are in DIRECT competition for the indistinguishable 15 – 24 year old female consumer in this sub category. It is exponentially critical for Limited Brands to return fire with a huge salvo in order to realize their plan for Pink and its contribution to the corporation. This is a potential > $1,000,000,000 business with millions of margin dollars to be had.

- Because of AEOS proven track record at grabbing huge chunks of market share VS has to react NOW. Unless the Limited management has other huge growth initiatives hidden up their sleeves they need to direct major time, energy and resources to this opportunity while they are still in the fight. If not Aerie will be perched in it’s eponymously named position looking down at Pink and what should have been.