Victoria's Secret earnings, Torrid store closures, Disney vs. Midjourney, and luxury's labor problem

Summary

The Glossy Podcast: Episode Summary

Title: Victoria's Secret Earnings, Torrid Store Closures, Disney vs. Midjourney, and Luxury's Labor Problem
Host: Danny Parisi
Guest: Jill Manoff, Editor-in-Chief
Special Guest: Zofia Zvaglinska, International Reporter
Release Date: June 13, 2025

Introduction

In this episode of The Glossy Podcast, host Danny Parisi engages in an insightful discussion with his editor-in-chief, Jill Manoff, and later with international reporter Zofia Zvaglinska. The conversation delves into the latest developments impacting the fashion and luxury industries, focusing on Victoria's Secret earnings, Torrid's significant store closures, a high-profile lawsuit involving Disney and Midjourney, and probing labor practices within luxury brands.

1. Victoria's Secret Earnings and Challenges

The episode begins with an analysis of Victoria's Secret's recent financial performance. Despite facing a projected $50 million operating income loss due to tariffs in 2025, the company's sales remained relatively stable.

Sales Performance:
Danny Parisi notes, "Their sales were pretty much flat, 1.353 billion this quarter compared to 1.359 billion, better than the analysts' expectation of 1.3 billion" (00:15).
Security Breach Impact:
Jill Manoff highlights a significant security breach that disrupted Victoria's Secret's website from May 26 to May 29, leading to an expected $10 million hit in Q2 earnings. "They tried to lean back into their roots with the October fashion show, but it remains questionable," Jill comments (02:01).
Leadership and Rebranding Efforts:
The discussion touches on the company's rebranding efforts under new leadership, including the appointment of a new CEO and CMO from Anthropologie. Jill mentions, "The CEO talked about the value of the beauty business and the ongoing strength of the Pink Sun Sub brand" (04:01).
Investor Scrutiny:
Danny brings up investor Brett Blundy's critical stance on Victoria's Secret's leadership decisions, including the costly acquisition of Adore Me, which failed to generate meaningful returns. "He implemented a shareholder rights plan to prevent a takeover," Danny explains (07:42).

2. Torrid’s Store Closures and the Plus-Size Market

The conversation shifts to Torrid, a leading plus-size retailer, which announced the closure of 180 stores—about 30% of their total locations.

Store Closures:
Danny outlines, "They're shutting down 180 underperforming stores this year, not entirely pulling back from physical retail but reallocating resources to refresh around 130 stores" (09:16).
Market Dynamics:
Jill observes, "When their whole shtick is specialty sizing, it's surprising that people aren't going into the store to try on more," highlighting challenges in the plus-size market where options remain limited.
Consumer Behavior:
Both hosts agree that the necessity of physical stores for plus-size shoppers is crucial, yet many feel underserved despite the digital dominance, with digital sales accounting for 70% of Torrid's business (09:55).

3. Lawsuit Against Midjourney and AI in Advertising

A significant portion of the episode is dedicated to the lawsuit filed by NBC Universal and Disney against Midjourney, a generative AI company specializing in image creation.

Lawsuit Details:
Danny explains, "Midjourney is being sued for copyright infringement, with claims that their AI uses copyrighted data without permission" (12:36).
Industry Implications:
Jill adds, "Creating tools like ChatGPT would be impossible if they couldn't be trained on copyrighted data," emphasizing the legal and ethical dilemmas facing the AI industry (15:05).
Future of AI in Marketing:
The hosts discuss the risks for brands using AI-generated content, including potential legal repercussions and customer backlash. Danny warns, "Using Midjourney for ad campaigns could expose brands to legal troubles if the AI generates copyrighted material" (19:34).

4. Luxury's Labor Practices and Consumer Perception

After a short break, international reporter Zofia Zvaglinska joins the conversation to discuss labor practices within luxury brands, focusing on Dior's recent investigation.

Dior’s Labor Investigation:
Zofia details, "Italy's Competition Authority closed an investigation into Dior for subcontracting practices, including paying workers as low as $2 an hour and utilizing illegal immigrant labor" (21:43).
Impact on Brand Image:
Danny reflects on the stark contrast between the high markup of luxury goods and the low production costs, stating, "Each Dior handbag was made for about $57 and sold for nearly $2,800—a 48 times markup" (24:08).
Industry-Wide Issues:
Zofia points out that Dior is not alone, mentioning similar investigations into Armani, Valentino, and Coach, which have faced scrutiny over labor sourcing and ethical practices (29:07).
Consumer Trust and Market Response:
The discussion emphasizes how these labor issues erode consumer trust and damage the prestigious image luxury brands strive to maintain. Zofia notes, "Customer perception and trust are paramount, and revelations about labor exploitation can have long-lasting negative effects" (36:57).
Evolving Luxury Landscape:
The hosts explore how the luxury market is adapting, with some brands like Polene leveraging transparent manufacturing processes and emphasizing quality to regain consumer trust (39:23).

Conclusion

The episode of The Glossy Podcast provides a comprehensive overview of critical issues affecting the fashion and luxury sectors. From Victoria's Secret navigating financial and cybersecurity challenges, Torrid's strategic store closures in the evolving plus-size market, the legal battles confronting AI in creative industries, to the deep-seated labor practices undermining luxury brands' reputations, the discussion underscores the complex interplay between business strategies, ethical practices, and consumer perceptions in today's marketplace.

Notable Quotes:

Danny Parisi [00:15]: "Their sales were pretty much flat, 1.353 billion this quarter compared to 1.359 billion, better than the analysts' expectation of 1.3 billion."
Jill Manoff [02:01]: "They had that security breach that shut down their website from the 26th to the 29th. So they're expecting that to hit their Q2 numbers by, I think, about 10 million."
Jill Manoff [09:55]: "There's a lot of talk among this shopper base that there's not a lot of options for them."
Danny Parisi [12:36]: "Midjourney is being sued for copyright infringement, with claims that their AI uses copyrighted data without permission."
Zofia Zvaglinska [21:43]: "Dior was under Italian investigation for subcontracting. Apparently, they had workers paid as little as $2 an hour."
Zofia Zvaglinska [36:57]: "With probes like this, that does end up feeding back into those social conversations. And effectively one of the reasons that the luxury market is tanking right now could be because of that customer perception and essentially a loss of trust."

Stay Tuned

For more in-depth discussions and the latest industry insights, subscribe to The Glossy Podcast on Apple Podcasts, Spotify, or your preferred podcast platform. New episodes are released every Friday, featuring interviews with industry insiders and comprehensive reviews of the week's most pressing news.

Summary

The Glossy Podcast: Episode Summary

Introduction

1. Victoria's Secret Earnings and Challenges

Sales Performance:
Danny Parisi notes, "Their sales were pretty much flat, 1.353 billion this quarter compared to 1.359 billion, better than the analysts' expectation of 1.3 billion" (00:15).
Security Breach Impact:
Jill Manoff highlights a significant security breach that disrupted Victoria's Secret's website from May 26 to May 29, leading to an expected $10 million hit in Q2 earnings. "They tried to lean back into their roots with the October fashion show, but it remains questionable," Jill comments (02:01).
Leadership and Rebranding Efforts:
The discussion touches on the company's rebranding efforts under new leadership, including the appointment of a new CEO and CMO from Anthropologie. Jill mentions, "The CEO talked about the value of the beauty business and the ongoing strength of the Pink Sun Sub brand" (04:01).
Investor Scrutiny:
Danny brings up investor Brett Blundy's critical stance on Victoria's Secret's leadership decisions, including the costly acquisition of Adore Me, which failed to generate meaningful returns. "He implemented a shareholder rights plan to prevent a takeover," Danny explains (07:42).

2. Torrid’s Store Closures and the Plus-Size Market

The conversation shifts to Torrid, a leading plus-size retailer, which announced the closure of 180 stores—about 30% of their total locations.

Store Closures:
Danny outlines, "They're shutting down 180 underperforming stores this year, not entirely pulling back from physical retail but reallocating resources to refresh around 130 stores" (09:16).
Market Dynamics:
Jill observes, "When their whole shtick is specialty sizing, it's surprising that people aren't going into the store to try on more," highlighting challenges in the plus-size market where options remain limited.
Consumer Behavior:
Both hosts agree that the necessity of physical stores for plus-size shoppers is crucial, yet many feel underserved despite the digital dominance, with digital sales accounting for 70% of Torrid's business (09:55).

3. Lawsuit Against Midjourney and AI in Advertising

A significant portion of the episode is dedicated to the lawsuit filed by NBC Universal and Disney against Midjourney, a generative AI company specializing in image creation.

Lawsuit Details:
Danny explains, "Midjourney is being sued for copyright infringement, with claims that their AI uses copyrighted data without permission" (12:36).
Industry Implications:
Jill adds, "Creating tools like ChatGPT would be impossible if they couldn't be trained on copyrighted data," emphasizing the legal and ethical dilemmas facing the AI industry (15:05).
Future of AI in Marketing:
The hosts discuss the risks for brands using AI-generated content, including potential legal repercussions and customer backlash. Danny warns, "Using Midjourney for ad campaigns could expose brands to legal troubles if the AI generates copyrighted material" (19:34).

4. Luxury's Labor Practices and Consumer Perception

After a short break, international reporter Zofia Zvaglinska joins the conversation to discuss labor practices within luxury brands, focusing on Dior's recent investigation.

Dior’s Labor Investigation:
Zofia details, "Italy's Competition Authority closed an investigation into Dior for subcontracting practices, including paying workers as low as $2 an hour and utilizing illegal immigrant labor" (21:43).
Impact on Brand Image:
Danny reflects on the stark contrast between the high markup of luxury goods and the low production costs, stating, "Each Dior handbag was made for about $57 and sold for nearly $2,800—a 48 times markup" (24:08).
Industry-Wide Issues:
Zofia points out that Dior is not alone, mentioning similar investigations into Armani, Valentino, and Coach, which have faced scrutiny over labor sourcing and ethical practices (29:07).
Consumer Trust and Market Response:
The discussion emphasizes how these labor issues erode consumer trust and damage the prestigious image luxury brands strive to maintain. Zofia notes, "Customer perception and trust are paramount, and revelations about labor exploitation can have long-lasting negative effects" (36:57).
Evolving Luxury Landscape:
The hosts explore how the luxury market is adapting, with some brands like Polene leveraging transparent manufacturing processes and emphasizing quality to regain consumer trust (39:23).

Conclusion

Notable Quotes:

Danny Parisi [00:15]: "Their sales were pretty much flat, 1.353 billion this quarter compared to 1.359 billion, better than the analysts' expectation of 1.3 billion."
Jill Manoff [02:01]: "They had that security breach that shut down their website from the 26th to the 29th. So they're expecting that to hit their Q2 numbers by, I think, about 10 million."
Jill Manoff [09:55]: "There's a lot of talk among this shopper base that there's not a lot of options for them."
Danny Parisi [12:36]: "Midjourney is being sued for copyright infringement, with claims that their AI uses copyrighted data without permission."
Zofia Zvaglinska [21:43]: "Dior was under Italian investigation for subcontracting. Apparently, they had workers paid as little as $2 an hour."
Zofia Zvaglinska [36:57]: "With probes like this, that does end up feeding back into those social conversations. And effectively one of the reasons that the luxury market is tanking right now could be because of that customer perception and essentially a loss of trust."

Stay Tuned

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