It doesn't take genius to understand the appeal of beautiful girls parading in their underwear. But Limited Brands, the company behind Victoria's Secret, has turned lingerie marketing into a fine art, or at the very least into high fashion. It's an approach the group's founder knows well. During the 1980s Leslie Wexner made The Limited into a fixture in shopping malls across the US with flashy but moderately priced women's fashion for style-conscious shoppers. He built on that success by transforming Victoria's Secret from a tiny mail order firm into a global brand. International sales are still dwarfed by the North America business, but the company continues to push agressively into new markets, not least China. The group has also extended its international presence with the purchase of Canadian company La Senza, and developed personal care and beauty chain Bath & Body Works as its #2 brand. The company changed its name to L Brands in 2013 following the sale of The Limited chain.
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Adbrands Daily Update 22nd Nov 2019: In a startling reversal of fortunes in the #MeToo era, Victoria's Secret has cancelled its annual fashion show, once a landmark broadcast TV special. Attitudes towards the blatant sexuality of brands such as VS have been gradually evolving in recent years, and sentiment turned sharply against the Victoria's Secret Fashion Show, and indeed the brand itself, at the end of 2018 following comments from longtime CMO Ed Razek about his habit of employing only traditionally beautiful sleek female supermodels. He was widely misquoted as saying, in an interview with Vogue, that "no one has any interest" in plus-sized models - his actual words were slightly less incendiary - and he also ruled out the use of transexual models. The media backlash was exacerbated by several quarters of declining sales, a new ratings low for the 2018 fashion show and then a pushback from investors. One leading shareholder Barington Group wrote to L Brands CEO Les Wexner this year complaining that Razek "has done a poor job of stewarding Victoria's Secret's brand by failing to communicate a compelling, up-to-date image that resonates with today's consumers. While we recognise that Victoria's Secret cannot be all things to all people, we believe that the Company should be delivering a more inclusive marketing message that promotes a more expansive view of beauty." That prompted Razek's departure from the company a few months later. After that the cancellation of the annual fashion special was only a matter of time. "We think it's important to evolve the marketing of Victoria's Secret," CFO Stuart Burgdoefer told investors this week. "There will be more to come as that continues to get evaluated.... [The show] was a very important part of the brand building of this business and was an important aspect of the brand and a remarkable marketing achievement. With that said, we're figuring out how to advance the positioning of the brand and best communicate that to customers."
Adbrands Weekly Update 26th May 2016: It's the end of an era. Victoria's Secret is to stop producing its iconic printed catalogue, making a saving of up to $150m a year. Instead it will re-route all direct sales towards online channels. The group launched a test of this strategy in 4Q 2015 by reducing its catalogue distribution by around 40%. To everyone's surprise there was no detrimental effect; if anything according to finance chief Stuart Bergdoerfer, direct actually increased by around 15%.
Adbrands Weekly Update 18th Feb 2016: In a surprise development, Victoria's Secret CEO Sharen Jester Turney resigned abruptly to spend more time with her family. She has led the business for a decade. Turney was not directly replaced; instead, Les Wexner, chairman & CEO of parent group L Brands, will assume her duties. Her sudden departure doesn't appear to be any reflection of performance. The group recently reported another set of record preliminaries for the year just ended, with Victoria's Secret total revenues up 6% to almost $7.7bn, and group revenues topping $12bn for the first time. Earnings are not reported until next week.
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Free for all users | see full profile for current activities: Leslie Wexner opened his first fashion store in Kingsdale Mall, Columbus, Ohio in 1963. He had already learned the ropes working for his mother and father in their own clothing store, Leslie's, named after him. But after falling out with his parents over how to develop their shop, he borrowed $5,000 from an aunt to set up on his own, selling moderately priced fashions to teenagers and women. He named his new store The Limited because of its limited range - just women's sportswear. In fact the business prospered, and mom and pop eventually closed their own store to assist their son.
By 1969 the company had expanded to six stores and raised additional funds with a small IPO. That led to further and more aggressive expansion during the 1970s, as The Limited established a strong presence in shopping malls all over the US. Its biggest selling point was its range of flashy, low-cost clothes which offered far more style than the rather more restrained clothing then sold by department stores. In 1980 a new brand was launched in Chicago under the Limited Express brand, and this was eventually separated out as a standalone business, renamed Express. Also in 1982, Wexner acquired Lane Bryant, a chain of more than 200 stores and mail order business selling larger sizes women's clothing.
But the most significant acquisition that year was Victoria's Secret, then a small mail order business with three stores in San Francisco. It had been started in the late 1970s by Stanford MBA student Roy Raymond, initially as a business project. Wexner paid just $1m to acquire the brand, playing up its Victorian English image, and later launching a separate French lingerie brand Cacique (subsequently closed). The group also acquired Henri Bendel in New York, the chain of almost 800 Lerner menswear stores, and the Abercrombie & Fitch clothing and mail order business. In a further development of The Limited brand, a menswear line was spun out in 1987, originally as Express Men's, followed by Limited Too for girls. In 1989, Express Men's was later shifted into its own separate business, renamed Structure. The group acquired British fragrance and cosmetics brand Penhaligon's in 1990, and opened its first Bath & Body Works store in the US.
By 1990 though, the group's phenomenal growth had stalled, especially at the flagship brand The Limited. Now a billionaire bachelor, Wexner was spending less and less time in the business, and instead enjoying the fine things in life. In his absence many key managers were poached by rivals. A core problem was also the growing demand among consumers for higher quality clothing, a development that cheap and cheerful The Limited had been slow to recognize. Meanwhile more upmarket brands such as Bendel and Abercrombie & Fitch were suffering a hangover from the boom years of the 1980s. Facing growing dissatisfaction from investors, Wexner reapplied himself to the group in an attempt to kickstart its share price.
In 1990, he spun out Victoria's Secret as a separate entity under the umbrella name of Intimate Brands, and launched an IPO. One of its biggest successes was the shape-enhancing Miracle Bra, introduced in 1994, but quickly rivalled by the Playtex Wonderbra. Victoria's Secret also diversified successfully into beauty products, and launched an e-commerce site in 1998. Making the most of more relaxed attitudes in the media towards scantily-clad females, the brand began an aggressive new marketing campaign in the late 1990s. In particular, the company splashed out on an expensive ad aired in the 1999 Superbowl, directing viewers to a free streamed video fashion show on the brand's website. The site was literally overwhelmed by more than 1m visitors in just half an hour, enough to crash the server. However it highlighted the marketability of the Victoria's Secret brand. A sturdier web broadcast in 2000 led to the first national TV network special on ABC in 2001. Meanwhile, Wexner continued to shuffle his portfolio of brands to allow Victoria's Secret more room to develop. Limited Too and Abercrombie & Fitch were both spun off as independent businesses, and Structure was merged back into Express in 2001. The Limited Inc and Intimate Brands were recombined again a year later as Limited Brands. See full profile for current activities
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