The rise and fall of Victoria’s Secret, America’s biggest lingerie retailer

Model Tyra Banks the Victoria’s Secret fashion show Wednesday, Feb. 3, 1999 in New York.
AP Photo/Mark Lennihan

Victoria’s Secret is the largest lingerie retailer in the US and has been for several decades.It has had a powerful role in defining what sexy is in the modern day via its racy lingerie and annual runway shows.But after achieving explosive success in the late 1990s and 2000s, the brand has struggled in more recent years and has been accused of losing relevance. In August, reports surfaced that Victoria’s Secret may have made a significant change by hiring its first transgender model. And in November, the company confirmed that it is officially canceling its fashion show this year. The show has been running since 1995.Here’s the story of the rise — and more recent fall — of the brand. Sign up for Business Insider’s retail newsletter, The Drive-Thru, to get more stories like this in your inbox. Visit Business Insider’s homepage for more stories.You’d be hard-pressed to find anyone in the US who hasn’t come into contact with Victoria’s Secret in one way or another. Since the late 1990s, Victoria’s Secret has been one of the best-known and most talked-about brands in the country — increasingly, not in ways that it might hope for. But it has had a powerful role in defining what sexy is in the modern day via its racy lingerie and annual runway shows and in its heyday, these enabled the company to achieve blockbuster sales and reach global status.Increasingly, the tide seems to be turning. Sales have slipped, customers are complaining that quality has dropped, and analysts are becoming more skeptical about the brand’s future if it refuses to adapt in the era of #MeToo.Earlier this year, the company faced a new challenge after it was caught up in the Jeffrey Epstein scandal. Victoria’s Secret is owned by a retail company called L Brands, and Epstein previously managed the money of L Brands CEO and founder Les Wexner. The two were reportedly once close friends. Epstein also reportedly tried to meddle in Victoria’s Secret’s business, offering input on which women should be models and using his connection to Victoria’s Secret to coerce them into sexual acts.Among the chaos, there have been some potentially positive changes this year, however. Victoria’s Secret hired its first-ever openly transgender model, and its longtime marketing chief stepped down. In November, the company confirmed that it had officially canceled its runway show this year. Find out more about how the company achieved success —and stumbled more recently — below:If you’re a current or former employee of Victoria’s Secret and have a story to share, contact this reporter at [email protected] or on Signal at +1 (646) 768-4716 using a non-work phone.

Victoria’s Secret was founded in 1977 by American businessman Roy Raymond.

Roy Raymond (left).
Wikimedia Commons

Inspired by an uncomfortable trip to a department store to buy underwear for his wife, Raymond set out to create a place where men would feel comfortable shopping for lingerie. He wanted to create a women’s underwear shop that was targeted at men.  

He named the brand after the Victorian era in England, wanting to evoke the refinement of this period in his lingerie.

Victoria’s Secret

His vision was summed up by Slate’s Naomi Barr in 2013: “Raymond imagined a Victorian boudoir, replete with dark wood, oriental rugs, and silk drapery. He chose the name ‘Victoria’ to evoke the propriety and respectability associated with the Victorian era; outwardly refined, Victoria’s ‘secrets’ were hidden beneath.”He went on to open a handful of Victoria’s Secret stores and launched its famous catalog. 

By 1982, the company was making more than $4 million in annual sales, but according to reports, it was nearing bankruptcy at the time. It was at this point that Les Wexner swooped in.

Les Wexner (center).
Getty/Astrid Stawiarz / Stringer

Wexner, who founded L Brands (formerly Limited Brands) was already making a name for himself in the retail world as he gradually built up an impressive empire.By June 1982, Limited — which had previously acquired Express and Lane Bryant — was listed on the New York Stock Exchange. One month later, under Wexner’s leadership, the company acquired Victoria’s Secret’s six stores and its catalog for $1 million. 

Wexner turned Raymond’s vision on its head, creating a store that was focused on women rather than men.

Nicholas Hunt/Getty

He was closely following the European lingerie market of that time and wanted to bring this aesthetic to the US. So, he set out to create a more affordable version of European upscale brand “La Perla” — lingerie that looked luxurious and expensive but was affordable.  

And it worked. By the early 1990s, Victoria’s Secret had become the largest lingerie retailer in the US, with 350 stores nationally and sales topping $1 billion.

Victoria’s Secret spring lingerie collection in New York Tuesday, February 6, 1996.
AP Photo/Adam Nadel

Source: The Telegraph

The brand began to cement its image over the next few years. In 1995, its famous annual fashion show was born.

Ed Razek.
AP Photo/Terry Gilliam

The show, which was run by Ed Razek (longtime chief marketing officer of L Brands), became an iconic part of the brand’s image. Razek and his team were responsible for hand-picking the models to walk the show. Because of this, he became one of the most important people in the modeling world, helping to launch the careers of Gisele Bündchen, Tyra Banks, and Heidi Klum.

In 1999, the show aired for the first time online. Time described it as the “internet-breaking moment” of this era after 1.5 million viewers tried to tune in and crashed the site.

Model Tyra Banks the Victoria’s Secret fashion show Wednesday, Feb. 3, 1999 in New York.
AP Photo/Mark Lennihan

Source: Time

Meanwhile, the brand was also launching some of its best-known and most successful products, including its heavily padded Miracle Bra and Body by Victoria.

Body by Victoria was a “blockbuster success” and more than doubled the sales volume of any other bra that Victoria’s Secret had previously launched, Michael Silverstein wrote in his book, “Trading Up.”

The runway shows became more lavish. In 2000, model Gisele Bündchen walked the runway in what was then the most expensive item of lingerie ever created, a $15 million diamond-and-ruby-encrusted ‘Fantasy Bra.’

AP Photo/Stephen Chernin

It’s been tradition for an Angel to wear a “Fantasy Bra” at every runway show since 1996. These change each year.

She became CEO of the whole brand in 2006. Under her nine-year tenure, the company thrived; sales increased by 70% to $7.7 billion.

Dimitrios Kambouris/Getty Images

Source: Business Insider

Turney abruptly stepped down in 2016 and was succeeded by Wexner as interim CEO.

L Brands

Wexner made a series of quick and fast changes: killing the catalog, swimwear, and apparel to focus solely on lingerie, the core part of its business.He also split the brand into three — Victoria’s Secret Lingerie, Victoria’s Secret Beauty, and Pink — and recruited a CEO for each division.

Jan Singer became CEO of Victoria’s Secret Lingerie in September 2016.

Courtesy of Spanx

Between 2015 and 2018, sales began to falter.

AP Photo/Mary Altaffer

Victoria’s Secret was slow to adjust to a shift from padded and push-up bras toward bralettes and sports bras, missing out on a major fashion trend. 

Singer was replaced by John Mehas, who took over the role at the start of 2019.

Agostini/Invision/AP

Mehas had his work cut out for him. Same-store sales at Victoria’s Secret were down 3% in 2018, and was gradually losing market share to new companies. Plus, he had angry shareholders to deal with. In March, activist shareholder Barington Capital sent a letter to Wexner, laying out recommendations to improve growth at Victoria’s Secret in order to “unlock substantial value.”In the letter, Barington’s CEO, James A. Mitarotonda, called out the company’s brand image as being “outdated.””Victoria’s Secret’s brand image is starting to appear to many as being outdated and even a bit ‘tone deaf’ by failing to be aligned with women’s evolving attitudes towards beauty, diversity, and inclusion,” he wrote. Read more: An activist shareholder is urging Victoria’s Secret parent to update ‘tone-deaf’ brand image to boost sales

Barington called out the lack of diversity in its board of directors as being an issue for the brand. At the time, of the 11 board members, nine were men.

Wexner and his wife Abigail both sit on the board of directors.
AP Photo/Jay LaPrete

It seems Victoria’s Secret has taken this criticism to heart. After acknowledging the letter in a statement, it appointed two new female board directors — Sarah E. Nash and Anne Sheehan — and made steps to address the comments about the brand image being outdated. 

It hired a more body-inclusive model.

Charles Sykes/Invision/AP

While she is not a plus-size model, fans praised the company for its decision to take on Hungarian model Barbara Palvin as one of its newest Angels.Instagrammers celebrated a post starring Palvin for being more body-inclusive, as they perceived her to be curvier than some of the brand’s other models.”This model actually looks healthy..& I’m loving it!” one Instagram user wrote.”At last! A real human body,” another said.

It also hired its first openly transgender model.

Getty/ Dominique Charriau / Contributor

Brazilian transgender model Valentina Sampaio, shared a photograph of herself on Instagram in August tagging the Victoria’s Secret Pink brand along with the hashtags: “campaign,” “vspink,” and “diversity.”A day later, she shared a video of herself with the caption “Never stop dreaming.”Her agent later confirmed that she had signed a contract with Victoria’s Secret.

The same day, Wexner announced that Razek would be resigning in the middle of August in a memo sent out to employees.

Les Wexner and Ed Razek pose backstage at the 2016 Fragrance Foundation Awards presented by Hearst Magazines - Show on June 7, 2016 in New York City.

Astrid Stawiarz/Getty Images for Fragrance Foundation

Source: Business Insider

And on November 21, the company confirmed that it had officially canceled its runway fashion show this year.

Dimitrios Kambouris/Getty Images

During a call with analysts after reporting its third-quarter earnings results, L Brands CFO Stuart Burgdoerfer responded to a question about whether the fashion show would run this holiday season. “We will be communicating to customers, but nothing similar in magnitude to the fashion show,” he said. Wexner previously told employees in May that Victoria’s Secret was “rethinking” the show. And Victoria’s Secret model Shanina Shaik — who has walked in several of its fashion shows — told The Daily Telegraph in Australia in July that the annual show was off this year. 

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