The rise and fall of Victoria's Secret, America's most famous lingerie retailer

Mary Hanbury

May 4, 2019, 19:17 IST

The rise and fall of Victoria's Secret, America's most famous lingerie retailer

AP Photo/Mark Lennihan
Model Tyra Banks at the Victoria's Secret Fashion Show on February 3, 1999, in New York.

Victoria's Secret is the largest lingerie retailer in the US and has been for several decades.
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.
Here's the story of the rise - and more recent fall - of the brand.
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.

It has had a powerful role in defining what sexy is in the modern day via its racy lingerie and runway shows. In its heyday, these enabled the company to achieve blockbuster sales and reach global status.

But increasingly, the tide seems to be turning. Sales have slipped, customers are complaining that quality has dropped, and analysts are becoming more skeptical about its future if it refuses to adapt in an era of #MeToo.

Find out more about how the company achieved success -and stumbled more recently - below:

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

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

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.

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 (now 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.

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.

Throughout the '90s and early 2000s, its commercials featured heavily made-up and scantily dressed Angels.

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."

In 2000, Sharen Jester Turney came on as CEO of Victoria's Secret Direct, heading up its catalog business.

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.

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

Between 2015 and 2018, sales began to falter.

More body-positive underwear brands such as Aerie, ThirdLove, and Lively cropped up, taking making share.

Between 2016 and 2018, its market share in the US dropped from 33% to 24%. Some shoppers complained that the quality of its underwear had slipped.

One of its biggest assets, 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 Konik wrote 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 oversexualized 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.

Less than a week after Razek's comments went viral, Singer resigned.

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

Barington called out the lack of diversity in its board of directors as being an issue for the brand. Of the 12 board members, nine are men.

Source: Business Insider

And it seems Victoria's Secret has taken this criticism to heart. While it did acknowledge the letter in a statement, it has also actively looked to replace three board members to be more diverse, according to The Wall Street Journal.