Victoria's Secret
Victoria's Secret is an American designer, manufacturer, and marketer of women's lingerie, Womenswear, and beauty products. The company was founded in 1977 by Roy and Gaye Raymond as a response to packaged underwear, which Roy Raymond considered to be "ugly, floral-print nylon nightgowns". As of 2019, in the United States, Victoria’s Secret is the largest lingerie retailer.
History
1977–1981
Victoria's Secret was founded by Roy Raymond, and his wife, Gaye Raymond, in San Francisco, California, on June 12, 1977. Eight years prior to founding Victoria's Secret, in the late 1960s, Raymond was embarrassed when purchasing lingerie for his wife in a department store. Newsweek reported him looking back on the incident from the vantage of 1981: "When I tried to buy lingerie for my wife," he recalls, "I was faced with racks of terry-cloth robes and ugly floral-print nylon nightgowns, and I always had the feeling the department store saleswomen thought I was an unwelcome intruder." Raymond spent the next eight years studying the lingerie market.
At the time when Raymond founded Victoria's Secret, most women in America purchased "dowdy", "pragmatic", "foundation garments" by Fruit of the Loom, Hanes, and Jockey in packs of three from department stores and saved "fancier items" for "special occasions" like honeymoons. "Lacy thongs and padded push-up bras" were niche products during this period found "alongside feathered boas and provocative pirate costumes at Frederick's of Hollywood" outside of the mainstream product offerings available at department stores. In 1977, Raymond borrowed $40,000 from his parents and $40,000 from a bank to establish Victoria's Secret: a store in which men could feel comfortable buying lingerie. The company's first store was located at Stanford Shopping Center in Palo Alto, California.
Raymond picked the name "Victoria" after Queen Victoria of the United Kingdom to associate with the refinement of the Victorian era. The "Secret" was what was hidden underneath the clothes. The “angels” comes from his wife being in a sorority, Pi Beta Phi, where their mascot was an angel.
Victoria's Secret grossed $500,000 in its first year of business, enough to finance the expansion from a headquarters and warehouse to four new store locations and a mail-order operation. By 1982, the fourth store (still in the San Francisco area) was added at 395 Sutter Street. Victoria's Secret stayed at that location until 1990, when it moved to the larger Powell Street frontage of the Westin St. Francis.
On April 1982, Raymond sent out his 12th catalog; each catalog cost $3 (equivalent to $7.79 in 2018). Catalog sales accounted for 55% of the company's $7 million annual sales in 1982. The Victoria's Secret stores at this time were "a niche player" in the underwear market. The business was described as "more burlesque than Main Street."
1982–1983
In 1982, Victoria's Secret had grown to five stores, a 40-page catalog, and was grossing $6 million annually. Raymond sold Victoria's Secret Inc. To Leslie Wexner, creator of Limited Stores Inc of Columbus, Ohio, for $1 million. In 1983, Wexner revamped Victoria's Secret's sales model. He discarded the money-losing model of selling lingerie to male customers and replaced it with one that focused on female customers. Victoria's Secret transformed from "more burlesque than Main Street" to a mainstay that sold broadly accepted underwear. The "new colors, patterns and styles that promised sexiness packaged in a tasteful, glamorous way and with the snob appeal of European luxury" meant to appeal to female buyers. To further this image, the Victoria's Secret catalog continued the practice that Raymond began: listing the company's headquarters on catalogs at a fake London address, with the real headquarters in Columbus, Ohio. The stores were redesigned to evoke 19th century England.
Howard Gross took over as president from his position as vice-president in 1985. In October of that year, the Los Angeles Times reported that Victoria's Secret was stealing market share from department stores; In 1986, Victoria's Secret was the only national chain of lingerie stores.
The New York Times reported on Victoria's Secret's rapid expansion from four stores in 1982 to 100 in 1986, and analysts' expectations that it could expand to 400 by 1988. In 1987, Victoria's Secret was reportedly among the "best-selling catalogs". At 1990, analysts estimated that sales had quadrupled in four years, making it one of the fastest growing mail-order businesses. The New York Times described it as a "highly visible leader", saying it used "unabashedly sexy high-fashion photography to sell middle-priced underwear." Victoria's Secret also released their own line of fragrances in 1992.
1990–2006
By the early 1990s, Victoria's Secret faced a gap in management that led the company to be "plagued by persistent quality problems". Howard Gross, who had grown the company significantly since Wexner's 1982 purchase, was moved to the poorly performing L Brands subsidiary Limited Stores. Business Week reported that "both divisions have suffered". Grace Nichols, who became President and CEO beginning in 1992, worked to resolve the quality problems; their margins tightened, resulting in a slower growth of profits.
Victoria's Secret introduced the Miracle Bra selling two million within the first year, but faced competition from Sara Lee's WonderBra a year later. The company responded with a TV campaign. By 1998, Victoria's Secret's market share of the intimate apparel market was 14 percent. That year Victoria's Secret also entered the $3.5 billion cosmetic market.
In 1999, the company aimed to increase its coverage with the Body by Victoria brand. In May 2000, Wexner installed Sharen Jester Turney, previously of Neiman Marcus Direct, as the new chief executive of Victoria's Secret Direct to turn around catalog sales that were lagging behind other divisions. Forbes reported Turney states, as she flipped through a Victoria's Secret catalog, "We need to quit focusing on all that cleavage." In 2000, Turney began to redefine the Victoria's Secret catalog from "breasts—spilling over the tops of black, purple and reptile-print underthings" to one that would appeal to an "upscale customer who now feels more comfortable buying La Perla or Wolford lingerie.";
2006–present
By 2006, Victoria's Secret's 1,000 stores across the United States accounted for one third of all purchases in the intimate apparel industry. In May 2006, Wexner promoted Sharen Jester Turney from the Victoria's Secret catalog and online units to lead the whole company. In 2008, she acknowledged "product quality that doesn't equal the brand's hype." In September 2006, Victoria's Secret reportedly tried to make their catalog feel more like magazines by head-hunting writers from Women's Wear Daily.
In February 2016, Turney stepped down as CEO of Victoria's Secret after serving for a decade. In 2016, direct sales only grew 1.6% and fell by 7.4% in the last quarter of the year, typically a high revenue period due to the holidays. The company discontinued its use of a print catalog and dropped certain categories of clothing such as swimwear. Sales revenue continued to stagnate and drop in early 2017.
In November 2018, it was announced that CEO Jan Singer had resigned amid declining sales. According to The Wall Street Journal, quarterly same-store sales in the last two years raised only once. The announcement came one week after CMO Ed Razek made the controversial comment that the company doesn't cast transgender or plus-size models in its annual fashion show "because the show is a fantasy." After a 40% stock plunge in a single year, Victoria's Secret announced in 2019 that it will be closing 53 stores in the U.S. The company also announced the relaunch of its swimwear line in March 2019.
Products
Current Products and Lines
Victoria's Secret
This is the main line of the brand including bras, underwear, lingerie, and sleepwear.
PINK
Victoria Sport In 2002, Victoria's Secret launched Pink (stylized PINK), a lingerie line targeted toward younger women in College, than Victoria's Secret's main line.
Victoria sport is a line of activewear that can be worn to the gym and on the street.
Victoria's Secret Beauty
The beauty line is composed of fragrances, make-up, accessories, lotions, and other bath and body products.
Swimwear
In 2002, swimwear was introduced and available via the web site and catalog. In 2015 and 2016, a swim special was aired on CBSto promote the line. In April 2016, Chairman and CEO Leslie H. Wexner announced that Victoria's Secret would end their swimwear line, replacing it with a new activewear line. In November 2018, John Mehas replaced Jan Singer as Victoria's Secret's CEO and announced the relaunch of the swimwear line. In March 2019, the swim line was made available in shops.
Recent product history
In 2010, Victoria's Secret launched the Incredible bra. In 2012, Victoria's Secret launched the Victoria's Secret Designer Collection described by Vogue as the company's "first high end lingerie line."
In 2016, Victoria's Secret stopped selling swimwear, shoes, accessories and apparel that were only sold in online Victoria's Secret stores to stay more focused on the lingerie, fragrances and sleepwear that are still available in stores and online. In 2017 Victoria's Secret began to put more emphasis on bralettes (bras without underwire, often intended to be worn visibly) and sports bras (under the Victoria Sport label) to appeal to a younger customer base.
In 2019, Victoria's Secret relaunched its product line of eyewear, footwear and swimwear line in hopes of boosting struggling sales for the brand.
Operating divisions
Victoria Secret's operations are organized into three divisions: Victoria's Secret Stores (stores), Victoria's Secret Direct (online and catalog operations), and Victoria's Secret Beauty (their bath and cosmetics line). The company does business in the following retail formats: general merchandise stores, apparel stores.
Victoria's Secret stores
Throughout the 1980s, Victoria's Secret took over the market using "faux-British veneer, romantic styling and soft classical music." In 2000, the Los Angeles Times reported that Victoria's Secret continued the practice of putting "on a British air—or what the Ohio-based chain thinks Americans believe is British. Boudoirish. Tony. Upscale."
During the 1990s, Victoria's Secret saw a 30% increase in store sales after the use of analyzing in their data warehouse in which specific store the styles, sizes and color of which bras were selling.
As of 2010, there are 1,000 Victoria's Secret lingerie stores and 100 independent Victoria's Secret Beauty Stores in the United States, mostly in shopping centers. They sell a range of bras, panties, hosiery, cosmetics, sleepwear, and other products. Victoria's Secret mails more than 400 million of its catalogs per year.
During the 1990s, store sizes grew from the average 1,400 square feet to between 4,000 and 5,000 square feet. In 2002, the average Victoria's Secret store was 6,000 square feet.
International expansion
Up until the early 2000s, management at Victoria's Secret actively decided to not expand outside the United States. The drive to continue growing coupled with facing a maturing of the American retail market led to a change in that decision and to expand Victoria's Secret outside the United States. Victoria's Secret announced the company's plan to expand into Canada in 2010. The company opened 23 stores stores in Canada with locations in Alberta, British Columbia, Manitoba, Ontario, Quebec, Nova Scotia and Saskatchewan.
In November 2005, the company opened its first boutique in the United Kingdom at Heathrow Airport, Terminal 5 with the help of World Duty Free. This was followed in 2009 with several Victoria's Secret Travel and Tourism stores residing within airports outside the United States. These include locations in Schiphol International Airport, The Netherlands.
Victoria's Secret opened their first store located at the Westfield Shopping Centre, Stratford, London on July 24, 2012. Their flagship 40,386-square-foot- (3,752.0 m2) store on New Bond Street, London opened on August 29, 2012, and there will be further nationwide expansion across the United Kingdom. Victoria's Secret executive vice president and chief administrative officer Martyn R Redgrave told Women's Wear Daily "That's what we're looking to do as we expand, in the UK in particular, and those will be company-owned and operated". Since 2013, stores opened across the United Kingdom in Leeds, Manchester, Sheffield, Birmingham, Bristol and London including Westfield London, Bluewater and Brent Cross and Glasgow. As of 2018, there are 16 stores in the United Kingdom.
International franchises
In 2010, Victoria's Secret expanded with franchises internationally.
The first franchise store in Latin America opened in Isla Margarita, Venezuela on June 25, 2010 followed by other stores in the country, and in Bogota, Colombia, in July 2012 selling beauty products and accessories. Angel's Group, the Colombian company operating the franchise, is planning to open 10 stores in Colombia. Victoria's Secret is also planning on opening a store in the exclusive Multiplaza Mall in San Salvador, El Salvador.
In 2010, M.H. Alshaya Co. opened the first Victoria's Secret store in the Middle East region in Kuwait. M.H. Alshaya Co. operates the Victoria's Secret franchise located in the Marina Mall selling products including "cosmetic and branded accessories, but it has left out the brand's infamous lingerie line".
The brand's first Caribbean store opened in November 2011 at Plaza Las Americas in San Juan, Puerto Rico. Two stores also opened in Santo Domingo, Dominican Republic at the Agora, (mainly selling beauty products and accessories) and Sambil Santo Domingo malls in August 2012 and October 2012, respectively.
The first Polish store opened in July 2012 at the Złote Tarasy shopping mall in Warsaw and is operated by M.H. Alshaya Co. It was the first Victoria's Secret franchise store in Europe, and it opened just a day before the first British store in London.
The first Serbian Victoria's Secret store opened in January 2014 at the Nikola Tesla Airport in Belgrade.[99] This was the first Victoria's Secret store to open in the former Yugoslavia.
Victoria's Secret Direct
Prior to the emergence of e-commerce, the Victoria's Secret's catalogs provided both an informative and exciting experience in the comfort of the consumer's home.
The catalog under Raymond's leadership took the form of an upmarket version of Frederick's of Hollywood lingerie catalog being more sensuous than the catalog published under the future leadership of The Limited.
The New York Times reported that the financial success of Victoria's Secret catalogs influenced other catalogs, which changed to present lingerie as "romantic and sensual but tasteful" "in which models are photographed in ladylike poses against elegant backgrounds."
This led to Victoria's Secret dominating the catalog field for "lingerie and sexy nightwear." The catalogs allowed for consumers to review the entire spectrum of product offerings, along the axes of style, color and fabric. Victoria's Secret accepted catalog orders via telephone 24 hours a day.
Victoria's Secret's catalog offers a more diverse range of merchandise.
The Los Angeles Times described the catalog in 2000 as having achieved "an almost cult-like following."
In May 2016, the brand decided to discontinue the catalog which had cost the brand $125 million to $150 million annually. The decision came after the brand had the impression that catalogs have grown stale as a marketing device and that tests of dialing back the release of its catalog hadn't resulted in negative sales numbers.
E-commerce
In 1995 Victoria's Secret began building its e-commerce website which the company launched after three years of development at 6 p.m. December 4, 1998, using the domain VictoriasSecret.com. Twenty minutes later the first order was placed on the website from a Littleton, Colorado, customer at 6:20 p.m.
It was reported that the three year development was a result of the company's concern of rolling out a half-baked website that could "discourage return visits".
Viewers who logged onto the Victoria's Secret's website to view the company's first webcast of their fashion show on February 3, 1999, were unable to view the webcast due to the Internet infrastructure Victoria Secret's selected was unable to meet user demand causing some users to be unable to view the webcast.
Victoria's Secret Beauty
The Limited, Inc in 1998 created Intimate Beauty Corporation with a mandate to establish a group of beauty businesses with Victoria's Secret Beauty being the first company in the firm's portfolio.
In November 2012 Susie Coulter became president of Victoria's Secret Beauty; the company's beauty division located in New York City.
Corporate affairs
Ownership
Victoria's Secret was originally owned by "The Limited". In 2002 Wexner reincorporated Victoria's Secret into the Limited; previously Victoria's Secret's parent company was Intimate Brands, a separately traded entity whose President was Ed Razek.
By 2006, 72% of Limited Brands' revenue—and almost all of their profits—came from their Victoria's Secret and Bath & Body Works units.
On July 10, 2007, the Victoria's Secret parent company, Limited Brands, sold a 75% interest in their apparel brands, Limited Stores and Express to Sun Capital Partners, to focus on expanding their Victoria's Secret and Bath & Body Works units. The immediate impact of the sale resulted in Limited Brands taking a $42 million after-tax loss.
In 2017 Victoria's Secret recorded net sales of about US$7.39 billion worldwide.
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