VICTORIA’S SECRET is an American designer, manufacturer, and marketer of women’s lingerie, womenswear, and beauty products. Founded in 1977 as a response to packaged underwear, which the company’s founder considered to be “ugly, floral-print nylon nightgowns”, the company is now the largest American retailer of women’s lingerie.
Founded June 12, 1977; 41 years ago
Stanford Shopping Center, Palo Alto, California, U.S.
Founder Roy Raymond
Headquarters Three Limited Parkway, Columbus, Ohio, U.S.
Number of locations: 1,017 company-owned stores, 18 independently owned stores
Areas served: Hungary, United States, Canada, United Kingdom, Italy, France, Spain, Portugal, Austria, Germany, Switzerland, Ireland, Poland, Serbia, Russia, Denmark, Norway, Sweden, Finland, Lebanon, Mexico, Chile, Argentina, Colombia, Brazil, Indonesia, Malaysia, Philippines, Japan, China, South Korea, South Africa, Egypt, Jordan, Israel, United Arab Emirates, Kuwait, Iran, Taiwan, Thailand, Australia, New Zealand and Singapore
Key people: Jan Singer, (CEO of Victoria’s Secret Stores)
Products: Underwear, women’s clothing, lingerie, swimwear, footwear, fragrances and beauty products, and make up.
Parent organizations: L Brands, The Limited
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 at 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 in 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 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.
In April 1982, Raymond sent out his 12th catalog; each catalog cost $3 (equivalent to $7.61 in 2017). 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.”
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”. In 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.
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 stating, as she flipped through a Victoria’s Secret catalog, “We need to quit focusing on all that cleavage.” In 2000, Turney began to redefine 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.”; “dimming the hooker looks” such as “tight jeans and stilettos”; and moving from “a substitute for Playboy in some dorm rooms,” to something closer to a Vogue lifestyle layout, where lingerie, sleepwear, clothes and cosmetics appear throughout the catalog. Beginning in 2000, Grace Nichols, CEO of Victoria’s Secret Direct, led a similar change at Victoria’s Secret’s stores—moving away from an evocation of 1800s England (or a Victorian bordello).
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.