Victoria's Secret needs a little bit of support...and not just the double-D kind.
Wall Street and lingerie connoisseurs alike are skeptical of the chain's decision to scale back on bralettes after an earnings sag this quarter, a six-year low for parent company L Brands Inc. (LB) - Get Report .
Insiders say that the bra-making giant's financial woes can be attributed to its decision to abandon bralettes as a major product, even though the item has become a lingerie staple for shoppers -- especially among younger demographics.
"Maybe Victoria's Secret is losing touch with consumers and what they want, focusing only at their bottom line," Luis Paredes, publisher of The Lingerie Journal, told the New York Post. "The bralette has become a style that people enjoy and has become a staple."
Bralettes will account for only 5% of Victoria's Secret's product mix moving forward, CEO Jan Singer said in an earnings call Thursday, Aug. 17.
"We're in the business of building bras. And I think that you and I probably know, if you've worn a bralette for more than a day, trying to wear them from the rest of your life is probably not your best option," she said.
Some analysts warn this may not be the most prudent approach.
"We worry that L Brands could be pushing against the consumer's true demand to try to move back to higher-priced categories, leaving us uncertain that share losses can reverse in the near-term," said UBS analysts in a research note, as reported by MarketWatch.
But others aren't so sure Victoria's Secret needs padding and underwire to ride out its dismal earnings.
"Like many trends, bralettes come and go, and now it's the tail end of that trend," Oppenheimer analyst Anna Andreeva told TheStreet Friday morning. "We think the Victoria's Secret is doing the right thing."
The slowdown is just a part of growing pains, she added. "There's a lot going on at Victoria's Secret-new leadership and new initiatives."
Singer, the former CEO of Spanx, took on the job last year after Sharen Jester Turney resigned.
Not to mention, Andreeva said, other retailers are also demoting the bralette, including American Eagle's Aerie and Urban Outfitters.
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Editors' pick: Originally published Aug. 18.