- Victoria's Secret is the largest lingerie retailer in the US, and has been for several decades.
- After explosive success it was accused of losing relevance but has since overhauled its brand image.
- Insider charts the rise, fall, and subsequent comeback of the brand.
Victoria's Secret was founded in 1977 by American businessman Roy Raymond.
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.
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.
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.
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 the 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.
Source: The Telegraph
The brand began to cement its image over the next few years. In 1995, its famous annual fashion show was born.
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.
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."
Around this time (1997), the idea of the Victoria's Secret "Angel" came into play after a commercial featuring Helena Christensen, Karen Mulder, Daniela Peštová, Stephanie Seymour, and Tyra Banks ran to promote its "Angels" underwear collection.
It's been tradition for an Angel to wear a Fantasy Bra" at every runway show since 1996. These change each year.
Throughout the '90s and early 2000s, its commercials featured heavily made-up and scantily dressed Angels.
Razek hired the best photographers and television directors in the world to make commercials for the brand.
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.'
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.
Source: Business Insider
Turney abruptly stepped down in 2016 and was succeeded by Wexner as interim CEO.
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.
Singer spent over a decade at Nike and was CEO of Spanx before she joined Victoria's Secret.
Between 2015 and 2018, sales began to falter.
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.
One of its biggest assets, the teen-centric brand Pink, also began to struggle. Sales slipped, and it resorted to heavy discounting to woo shoppers.
"We believe Pink is on the precipice of collapse," Jefferies analyst Randal Konikwrote in a note to investors in March 2018, commenting on the level of promotions in store.
Some parents complained that Pink was being brought down by Victoria's Secret's over-sexualized ads.
Its annual fashion show drew criticism for being outdated, and viewership slipped.
In November 2018, Razek sent the internet into a frenzy after he made controversial comments about transgender and plus-size models.
Razek said in an interview with Vogue that he didn't think the show should feature "transsexuals" because the show is a "fantasy." "It's a 42-minute entertainment special. That's what it is," he said in the interview.
Razek made a formal apology online but some of his critics called for him to step down.
Less than a week after Razek's comments went viral, Singer resigned.
Source: Business Insider.
Singer was replaced by John Mehas, who took over the role at the start of 2019.
Mehas had his work cut out for him. Same-store sales at Victoria's Secret were down 3% in 2018, and the retailer was gradually losing market share to new companies.
Plus, he had angry shareholders to deal with. In March 2019, activist shareholder Barington Capital sent a letter to Wexner, laying out recommendations to improve growth at Victoria's Secret and called out the company's brand image as being "outdated."
Barington also 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.
It seems Victoria's Secret took 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.
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 userwrote.
It also hired its first openly transgender model.
Brazilian transgender model Valentina Sampaio, shared a photograph of herself on Instagram in August 2019, 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.
Source: Business Insider.
And on November 21, 2019, the company confirmed that it had officially canceled its runway fashion show that year.
At the time, L Brands CFO Stuart Burgdoerfer told analysts that the fashion show didn't have a big impact on boosting sales at the brand.
While these were potentially positive changes, the brand found itself caught up in a new challenge in the summer of 2019: its CEO and the company being linked to convicted sex offender Jeffrey Epstein.
Epstein managed Wexner's money for several years, and former company executives told the Wall Street Journal that he tried to meddle in Victoria's Secret's business,offering input on which women should be models.
Some of Epstein's victims came forward saying that he used his connection to Victoria's Secretto coerce them into sexual acts.
L Brands' board of directors announced that it had hired an outside law firm to review its relationship with Epstein, who died by suicide in jail in August 2019.
In September, Wexner addressed his ties to Epstein at L Brands' investor meeting."At some point in your life we are all betrayed by friends," Wexner said. "Being taken advantage of by someone who was so sick, so cunning, so depraved, is something that I'm embarrassed I was even close to. But that is in the past."
In February 2020, the company announced that Wexner would be stepping down as chairman and CEO of L Brands but would stay on as chairman emeritus and sit on the board of directors. At the same time, it announced that it was selling a 55% stake in Victoria's Secret to private-equity firm Sycamore Partners.
In a statement to the press announcing the news, Wexner said that Sycamore has "deep experience in the retail industry and a superior track record of success," and that it "will bring a fresh perspective and greater focus to the business."
In March 2020, the coronavirus pandemic swept across the US and Victoria's Secret was forced to shutter its stores.
In April 2020, Sycamore filed a lawsuit to back out of the deal, alleging that Victoria's Secret's actions taken during the pandemicto close stores, cut back on new inventory, and not pay rent for the month of April were in violation of the agreement that the two parties had made in February.
L Brands immediately issued a statement saying that a termination of the agreement is "invalid," and that it would "vigorously defend" the lawsuit and "pursue all legal remedies to enforce its contractual rights."
On May 4, 2020, L Brands announced that the deal with Sycamore had officially fallen apart.
L Brands said that it had come to a "mutual agreement" with Sycamore to "terminate" the deal.
The company also said that it had reshuffled its management team and would focus on "implementing significant cost reduction actions and performance improvements at Victoria's Secret."
This included permanently closing as many as 250 Victoria's Secret and Pink stores in the US and Canada in 2020.
In the second half of 2020, the brand started to recover, boosted by more sales online.
Jefferies analysts described Victoria's Secret's progress as "admirable" after it reported strong fourth-quarter earnings in early 2021.
Bloomberg later reported that L Brands had resumed discussions to sell the brand once more and was seeking a much higher valuationin the region of $3 billion.
But in May of that year, L Brands put an end to speculation and said that it was no longer looking for a buyer and would split the company in two and spin off Victoria's Secret to become a standalone business.
It then worked hard to execute a turnaround under new leadership.
It overhauled its brand image – swapping its Angels for a new group of activists and entrepreneurial women to be the face of the brand.
In 2022, a three-part documentary series on Hulu titled "Victoria's Secret: Angels and Demons" shook up the brand in the eyes of the public.
The series delved into Wexner's ties with Jeffrey Epstein and said that questions remained about the nature of their relationship.
In the background, the company was continuing with its turnaround effort by launching new ventures such as Happy Nation, a brand that sells first bras and apparel to pre-teen shoppers.
It also began selling beauty products on Amazon.
And in March 2023, the company said its annual fashion show would return after a four-year hiatus.
The company is constantly innovating "in all spheres of the business," a spokesperson for Victoria's Secret told Insider, adding:"This will lead us into new spaces like reclaiming one of our best marketing and entertainment properties to date and turning it on its head to reflect who we are today."
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