The Secret of Victoria's Secret

Roy Raymond sometime in the mid 1970s walked into a department store to buy his wife some lingerie, only to find ugly floral-print nightgowns—made even uglier under harsh fluorescent lights—and saleswomen who made him feel unwelcomed just for entering the store. However in came a perspective which made Roy realize that other men also might feel the same, thus the 30-year-old saw an opportunity to create a market: A lingerie store designed to make men feel comfortable while shopping there Raymond imagined a place with premium quality interiors like dark wood, oriental rugs, and silk drapery ensuring a sign of status for anyone who wished to just enter there. He chose the name “Victoria” to evoke the propriety and respectability associated with the Victorian era; outwardly refined, Victoria’s “secrets” were hidden beneath. In 1977, with $40,000 of savings and $40,000 loans from family, Raymond and his wife leased a space in a small shopping mall in Palo Alto, Calif., and Victoria’s Secret was born. To understand how novel Raymond’s idea was, it helps to have a little context. In the 1950s and ’60s, underwear was all about practicality and durability. For most American women, intimate lingerie was reserved for the honeymoons or the anniversary nights; Frederick’s of Hollywood was the granddaddy of the specialty lingerie retailers. When the women’s movement of the late 1960s and ’70s called for women to liberate themselves from the bondage of bras, the intimate apparel industry responded with new designs that they claimed would give women the natural look they desired without the embarrassment of a sagging bustline. But for the most part, underwear remained functional, not fun. Victoria’s Secret changed all that, and in the Bay Area, its sales sky-rocketed—thanks to the smart advertising done via preparing a catalog of the most sensual lingeries worn by the most hottest women at that time, which reached customers across the country. Within five years, Raymond had opened three more stores in San Francisco. By 1982, the company had annual sales of more than $4 million—yet something in Raymond’s formula was not working as the company barely met operating costs and selling margins. According to management experts Victoria’s Secret was nearing bankruptcy. Enter Leslie Wexner, the man who had ushered in the mass-market sportswear boom with a store he called The Limited. So in 1963, he opened a store “limited” just to sportswear. As Wexner thought that there was a more demand in sportswear than dresses and Wexner’s foresight that sounded to good to be true became a reality. Wexner's company grew to 11 stores by 1970, and 188 by 1977, making his net worth $50 million. By the early 1980s, Wexner was looking to branch out into new brands. While visiting one of his Limited outposts in San Francisco, he stumbled across Victoria’s Secret. Wexner was intrigued with the fact that the store had a segment of very sexy lingerie unlike any other in the US but their catalog had a problem as the models featured in it seemed quite uncomfortable wearing the lingerie, He realised that Raymond had focused so much on making the store appealing to men that he indeed forgot that afterall women were the ones who were going to wear it. Wexner surmised that women were about as uncomfortable in Victoria’s Secret as Raymond had been in that flourescent-lit department store. Nevertheless, Wexner saw the company’s potential, and in 1982, he bought the stores and the catalog for about $1 million (not $4 million, as was reported at the time). His first step was to study European lingerie boutiques, whose female customers approached lingerie as an everyday essential. Wexner returned home convinced that if American women had access to the same kind of sexy, affordable lingerie as their European counterparts, they, too, would want to wear it every day. He also saw a gaping hole in the intimate apparel market—next to no products that filled the gap between the luxury brands and the Maidenforms and Cross Your Hearts. Finally, a new shopping environment—one that was inviting to women and fulfilled an attainable fantasy of glamour and luxury—would help create greater demand. Wexner ultimately decided to create for the company what Ralph Lauren mastered the decade before him. The catalog was instilled with design iterations and the one which had become modern and racy, was now softened to reflect the new image, with models who looked like they had just walked off the pages of European magazines like Vogue or the Glamour In short, women were buying, while men continued to ogle the catalog. Wexner’s plan was working. By 1995, according to Trading Up, Victoria’s Secret had become a $1.9 billion company with 670 stores nationally. As they continued to refine and tweak the company image Victoria’s Secret became the most popular apparel brand in the world today, with a net income of nearly $5 billion. Sadly, as Wexner’s and Victoria’s Secret’s success grew, Roy Raymond, despite his keen instincts, saw his life fall apart. After selling the company to Wexner, Raymond stayed on as president of Victoria’s Secret for about another year before leaving to open My Child’s Destiny, a high-end children’s retail and catalog company based in San Francisco. But here Raymond tried to use the same marketing strategy as the one used by him in Victoria's Secret by trying to create a prestige around the brand by targeting only the higher end parents and an even poorer location lead to no substantial growth in the company and was forced to file a Chapter 11 petition two years later in 1986. The Raymonds ended up divorcing, and in 1993, Roy Raymond jumped to his death from the Golden Gate Bridge, leaving behind two teenage children. Roy Raymond’s genius was recognizing the need to remove shame from the process of buying unmentionables. Though his story reads like a cautionary tale of how a brilliant opportunity can be seized and yet missed. Wexner, on the other hand, had both vision and skill. He imagined a world where there was no such thing as an unmentionable, and figured out a way to make it so. He made sexy underwear commonplace, and convinced us that investing in what’s underneath our clothes is as necessary as the clothes themselves. Today Victoria's Secret stands as one of the most popular places to not just buy lingerie but women accessories as well Sources