SEX SELLS, and it sells few things better than lingerie. Nowhere is that more evident than the Victoria’s Secret fashion show. Befeathered models, known as “angels”, shimmy down a runway to promote America’s biggest underwear retailer. In 2011 more than 10m people watched it on television. But on December 2nd just 3.3m viewers tuned in (see chart).
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Victoria’s Secret has around a tenth of a global lingerie market worth $78bn, according to Euromonitor International, a research firm. It shows all the signs of a tired brand struggling to keep up with customer tastes. In America its market share has plunged from almost 33% two years ago to around 24% today, as social media and e-commerce make it easier for new brands to enter the market. Shares in L Brands, its parent company, were worth $100 three years ago; today they go for $30. Newcomers are disrupting every part of retail, but Victoria’s Secret has made its woes worse.
When Roy Raymond started the firm in 1977, he wanted shops where men could comfortably buy lingerie for their wives and girlfriends. Velvet sofas and silk drapes made them look more like boudoirs than places for women to find supportive undergarments. Leslie Wexner, L Brands’ boss, who bought the firm in 1982, added soft lighting and floral prints to give it more appeal to women, his main customers. Once its chief asset, the brand’s sexiness now looks like a liability. “The way people dress has changed,” says Serena Rees, a stalwart of the industry whose most recent project is a brand of unisex underwear. “People don’t want boobs up under their chin or things pressed or pushed in.”
A slew of competitors, promoting comfort and inclusivity, have taken that message to heart. Aerie, the underwear arm of American Eagle Outfitters, commands just 3% of the American market but has increased its sales by an average of 11% each year since 2016, compared with an average 9% annual decline for Victoria’s Secret over the same period, according to Euromonitor. Thirdlove, an online brand which has sold over 3m bras since its launch in 2013, is growing at around 300% a year.
The newcomers have tweaked the old formula. Michelle Cordeiro-Grant left Victoria’s Secret, where she was a senior merchant, and went on to found Lively, an online underwear brand. She argues that what makes women sexy is confidence, meaning an emphasis on comfort: 70% of the bras sold by Lively are wireless.
They are eager to emphasise inclusivity, too. According to Mintel, a research firm, over half of consumers in Britain, France, Germany, Italy and Spain reckon fashion retailers should use more realistic models. Thirdlove’s ads feature models in their 60s, or who are breastfeeding. Since 2014 Aerie has eschewed digital retouching for photos. The response has been overwhelmingly positive, says Stacey McCormick, an executive at Aerie. When Rihanna, a pop star, launched her Savage x Fenty line of underwear in May, the models were every size and shape. People queued for hours online to buy the products.
Victoria’s Secret looks out of touch by comparison. In November Ed Razek, a company executive, dismissed suggestions that its show should have transgender and plus-size models, insisting it was meant to be a “fantasy” (he had to apologise). The show does the brand a disservice, reckons Randy Konik, an analyst at Jefferies, an investment bank, and one of Victoria’s Secret’s knockers.
Focusing on the need for comfort rather than male taste is good business; women purchase the vast majority of female underwear. “The repeat business is in basics,” says Heidi Zak, Thirdlove’s founder, not lacy luxuries. Some 12m women have used Thirdlove’s “fit finder” to determine which bra to buy. Easy returns alleviate customers’ worries about buying online.
Victoria’s Secret is not about to go bust. The firm’s scale is such that with the right rebranding, it could bounce back. In November it replaced its chief executive, Jan Singer, with John Mehas, formerly of Tory Burch, a fashion retailer. Following that rejig Victoria’s Secret has held off on big announcements. “Everything is on the table,” said one executive on an earnings call last month. But in the wake of the #MeToo movement, it will have to tread carefully.
Women’s underwear has always been controversial. Fifty years ago, as the sexual revolution took off, a protest at the Miss America pageant cemented the incorrect notion that feminists burn their bras (they actually threw them in a “freedom trash can”). Marks Spencer, Britons’ favourite underwear seller, was attacked on social media last month for its advertising of “fancy little knickers” as a must-have for her next to “outfits to impress” for him. It is in this tricky environment that retailers such as Victoria’s Secret operate.