Undressing Victoria: Trading up to create a New Luxury brand

“Victoria’s Secret has elevated the price and position of lingerie to unprecedented heights. In the third of this series on Luxury Branding, Neil Osborne reveals how a three-store company used the ‘trading up’ phenomenon to create a New Luxury brand – and a big-money empire.

Think back.

In the 50s and 60s, underwear was dowdy. Lingerie – if you ever owned any – was reserved for your honeymoon or an anniversary night. Never for every day. Fast forward and what do you have? It’s anything but boring, sometimes frivolous and often on show.

So what (or who) transformed an entire category by turning innerwear into outerwear, stretching practical into fashionable and in the process made sexy mainstream? The world’s best-known, bestselling and most profitable lingerie brand, Victoria’s Secret.

But that’s not how it started. Targeted solely at men shopping for their wife’s underwear, its 1977 beginnings were a little odd. Despite that it grew, primarily on the back of its 42-page mail-order catalogue, but poor profitability pushed it toward bankruptcy.

In 1982 a new owner took the helm – one who sensed that lingerie had unrealised potential, as fashion. Leslie Wexner discarded the unprofitable business model and revamped the brand to appeal to women. Stores quickly spread across the newly malled suburbs of America and the brand began its pattern of making a stir. The lingerie business was changing fast.

Five years after the purchase, Victoria’s Secret had transformed from a 3-store boutique into a 346 store retailer. Wexner had created a market where none existed.

He built a New Luxury brand…”