Surge in China’s top lingerie maker short-lived even with Victoria’s Secret ex-CEO on board
Shares of Chinese lingerie maker Cosmo Lady, which surged on Monday following the appointment of former Victoria’s Secret CEO Sharen Jester Turney as its chief strategic officer, could not sustain its momentum.
The shares closed 0.5 per cent lower in Hong Kong on Tuesday after jumping as much as 12 per cent in the previous session, after China’s top maker of intimate wear by market share, said Turney would oversee its operational issues including mergers and acquisitions as well as overseas expansion.
“Executive reshuffles could easily affect the share performance of mainland Chinese companies,” said Shen Meng, executive director with investment bank Chanson & Co. “But the changes are usually a flash in the pan, as a single senior executive cannot change the fundamentals of a company that easily.”
Zhou Ting, director with Fortune Character Institute, a Chinese consultancy that focuses on luxury lifestyle, said that since mainland companies have a unique corporate culture and work environment, Turney might not find it easy.
“Foreign executives often appear to be unaccustomed to [the inner workings of ] Chinese companies,” she said.
Turney, 61, will provide advice on the company’s strategic planning and implementation, improving brand image, product design and recruitment of designers, overseas mergers and acquisitions and retail operations, the company said in a stock exchange filing on Monday.
Turney, who has spent nearly four decades in the retail and fashion business, served as the president and CEO of Victoria’s Secret, the biggest lingerie company in the world from 2006 to 2016. With her at the helm revenues grew from US$4.5 billion to US$7 billion.
Under Turney, Victoria’s Secret was also turned into a cultural phenomenon, thanks to its annual lingerie show that is broadcast online and on television, attracting some of the biggest celebrities, including pop artists such as Taylor Swift and Nicki Minaj.
In November 2017, the company held its first ever lingerie show in China, featuring top Chinese models such as Liu Wen, with tickets to the show reportedly fetching up to 350,000 yuan (HK$411,000) online.
Guangdong-based Cosmo Lady reported 317 million yuan in profit for 2017, while revenue for the period reached 4.54 billion yuan, little changed from 2016.
China’s lingerie market is growing at over 20 per cent a year, according to China Textile and Apparel Council.