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Victoria's Secret's New Plan For Stores: "Fewer, Better People"

"I'm imagining in a couple of years, virtually every sales associate is looking for a career in retailing and 10-20% will be store managers somewhere in the world in a year," L Brands' CEO said yesterday.

Posted on November 4, 2015, at 1:57 p.m. ET

John Sciulli / Getty Images

L Brands, which abolished erratic on-call shifts at its Victoria's Secret and Bath & Body Works chains earlier this year, has more changes planned for its workers, including a shift to more full-time staffers, higher wages and better training.

"My fundamental belief is that fewer, better people will do better, and that's in our customer's interest," L Brands CEO Les Wexner said at the company's annual investor meeting Tuesday. "We think paying people $20 an hour would probably attract better people than if we're paying $8.50. Now we're trying to prove that and we're getting some traction, really some traction."

"This relates then to how we train people, the pipeline of people," he continued. "I'm imagining in a couple of years, virtually every sales associate is looking for a career in retailing and 10-20% will be store managers somewhere in the world in a year. They can literally go from $40,000 to $100,000 a year in compensation."

The emphasis on staffing its stores with a smaller pool of better paid people bucks the overall trend in the retail industry, where chains have become heavily reliant on low-wage hourly workers. Stuart Burgdoerfer, the L Brands finance chief, said such staffing takes its toll on customer service.

"How well can they really know your business, how invested are they in us, are we in them, if they're only working a few hours per week and their turnover rate is very high?" he said at the meeting. "So we see the opportunity to have a more knowledgable, a more engaged or effective and productive associate when she's typically working more hours per week."

The company estimates investments in its "store selling initiative" could boost revenue by 10% to 15% in the next few years — a substantial increase for a company that most recently brought in $11.5 billion in annual sales.

L Brands is considered a leader in the retail industry, with Wexner playing a role in the development of popular mall chains from Abercrombie & Fitch to Express and Lane Bryant. Its stock recently shot up to $100 a share and is up 35% over the last 12 months. L Brands employed almost 60,000 part-time associates as of Jan. 31 and 80,100 associates overall.

L Brands and 12 other U.S. retailers were part of a probe into on-call scheduling earlier this year by the New York State attorney general's office, while Victoria's Secret was sued over the practice in California. Call-in shifts, which can save millions in staffing costs for retailers, usually appear alongside regular shifts on store workers' schedules, but require them to phone in before start-time — sometimes as little as two hours before — to find out if they're needed. If not, they go unpaid.

L Brands, Gap, J.Crew, Urban Outfitters and Abercrombie have all also announced plans to end the practice in recent months.

The company has roughly 3,000 stores worldwide, including PINK, La Senza and Henri Bendel locations.

A BuzzFeed News investigation, in partnership with the International Consortium of Investigative Journalists, based on thousands of documents the government didn't want you to see.