Victoria Research

Victoria Secret

Authors:

Todd Quackenbush

Sherman Yee

Jason Flennoy

Instructor: Mark Rasiah

GM 533: Applied Managerial Statistics

20 December 2006

TABLE OF CONTENTS

ABSTRACT (n/a) 3

PURPOSE OF PROPOSAL 4

OVERVIEW OF ORGANIZATION (Todd) 5

ANALYSIS OF ISSUES (Todd: why only this year and not 2005)

Data collection (Todd) 7

OVERALL MANAGEMENT PLAN 10

IDENTIFICATION OF SUGGESTED MAJOR CHANGES 14

IDENTIFICATION OF NEW TECHNOLOGY 16

SAMPLE DATA ENTRY SCREEN 20

CONVERSION

Forecast (Todd) 22

QUALITY ASSURANCE MEASURES 26

WORKS CITED 28

OVERVIEW

Victoria's Secret, one of the world's most recognizable fashion brands, established itself in the Bay Area in the early 1970s. Originally owned by an ambitious Stanford graduate looking for a comfortable and high-end retailer to buy his wife lingerie, Roy Raymond opened the first store at Stanford Shopping Center. Styled after a Victorian boudoir, Raymond's success prompted him to open three other locations, a catalog business, and a corporate headquarters within a few years. His inability to balance finances with his creative vision, Roy Raymond fell into trouble and was forced to sell his company for the small sum of $1 million dollars to The Limited, an Ohio-based conglomerate owned by Les Wexner.

Les Wexner rapidly expanded on the national attention Victoria's Secret had been receiving by opening over 400 stores by 1990 and currently operates approximately 950 stores nationwide. While Victoria's Secret is known for its lingerie sales, it has successfully launched a beauty division and also carries brands like Betsy Johnson, Dolce & Gabbana and Intimissimi, an affordable Italian brand. Victoria's Secret Direct, the catalog division of the company, continues to see growth as sales reached $870 million in 2005, but the star is still it's retail stores. Yearly sales for Victoria's Secret stores topped $2.6 billion dollars in 2005 and our store on Powell Street recently surpassed the $10 million dollar mark in sales for 2006, making it the 13th store in the company based on volume.

ANALYSIS OF ISSUES

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We are using October 2006 as the base for our forecasted sales due to the many changes that have occurred in the last year. Several product lines have been introduced to compensate for the loss of other sub-brands which have grown into their own. Victoria's Secret Pink is a sub-brand that evolved into its own stand-alone store in August, taking it's 12-15% of total sales to its new location next door. Replacing Pink is Intimissimi, an Italian brand that is expected to impact 6-8% of the store's sales, but caters to a more sophisticated client. Thrid party brands are also making a stronger appearance this year as the store became a 'critical fashion' destination. New lines from Betsy Johnson, Anna Sui, Chantal Thomass and Pleasure State create a new sophistication for the store, but its higher price may alienate the average shopper.

The launch of the new Very Sexy Makeup line also impacted our ability to accurately compare October 2005 with the same month in 2006. A complete renovation of the make up line launched in September 2006 provided heightened figures from the beauty zone, again making yearly comparisons difficult. The good news is that new product lines as immense as those listed above are not on the agenda for 2007 and will provide a stronger correlation for future data.

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