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It’s up to the beholder whether Victoria’s Secret is sensual or seamy, titillating or tasteless.
So what’s the view from inside the rapidly growing $4 billion brand?
“We will always walk that fine line,” said Victoria’s Secret Direct president and chief executive officer Sharen Jester Turney. “We must stay on the edge…always defining what is next in terms of [our] core equities — sexy, sophisticated and being forever young.
“What was sexy a few years ago is different from what is sexy today, and it will evolve in the years ahead. Early marketing efforts depicted bony, harsh androgynous women in garter belts and stiletto heels,” she said. “But in the Nineties, feminism discovered pleasure. Women were allowed to be strong, serious and intellectual — and still wear really great lingerie.”
While the “core equities” are a constant, change at Victoria’s Secret, whether it’s cutting-edge or controversial, is critical to the agenda. As Turney sees it, strategies for the future include:
- Adding third-party brands to the assortment and developing strategic partnerships. “Multiple ideas must come from multiple sources — internal design, external design and third parties. We will never get there if we rely on a single pathway,” Turney said.
- Finding more ways to interact with customers online, which represents more than half of the VS Direct business. Personal shoppers and personalized fashion shows online are possibilities.
- Interacting with customers via TV. “The tipping point for interactive TV is not far down the road,” Turney said.
- Increasing product commercialization capacity by 300 to 500 percent.
- Maintaining high-volume increases and double-digit margins through trading up and greater segmentation through subbrands such as Body by Victoria for modern and sophisticated looks; Angels, for a more romantic look, and Pink, for a younger spirit.
- Developing alternative venues for the annual Victoria’s Secret Fashion Show, now considered a cultural phenomenon.
Turney also said the corporate mind-set is changing. “Today, with our mix of products and how we bring those products to market, we no longer think of ourselves as a retailer…we have evolved to be an upscale packaged goods company that controls its channels of distribution,” Turney said, echoing the words of Leslie H. Wexner, Limited Brands’ chairman and ceo.
Turney cited Bath & Body Works’ new apothecary concept called C.O. Bigelow. The first Bigelow unit, considered a test, bowed in Easton Town Center, in Easton, Ohio, not far from Limited’s headquarters, and features such brands as Frédéric Fekkai, L’Artisan Parfumeur, Molton Brown, Murad, Nars and Acqua Di Parma.
Included in the evolution is the Victoria’s Secret holiday fashion show, which has long been an international marketing and media extravaganza, but this year is being staged on a more localized platform. Turney said it’s the “biggest, boldest holiday initiative yet,” with the first nationwide tour, billed as “Angels Across America” and featuring supermodels visiting major cities.
“We see this evolution in our fashion shows: from a hotel lobby, to a first-ever Web cast advertised during the Super Bowl, which resulted in a near-Internet meltdown, to an international platform in Cannes teaming with Hollywood heavyweight Harvey Weinstein of Miramax Films to produce a charity fashion show that netted Cinema Against AIDS a record $3 million in one night, to New York with an unprecedented one-hour nationally televised prime-time special with musical performances by Sting and Mary J. Blige reaching more than 12 million viewers.”
The theatrics contribute to the bottom line. “While most of our Direct apparel competitors deliver 5 to 8 percent operating margins, at Victoria’s Secret Direct, we achieve an operating margin in the high teens on $1 billion of sales.”
Turney said most people still think lingerie is the biggest category of business for Victoria’s Secret. However, lingerie and apparel each represent about a third of the volume. The final third is represented by shoes, beauty and swim. “Most people don’t realize that we have a more than $400 million apparel business,” she said.
Sales are growing most rapidly on the Web at about 40 percent this year, according to Turney.
But business isn’t a complete breeze. “There is a certain complexity associated with our size and scale,” Turney said. Among the challenges she cited were coordinating product launches so they have a single point of view in stores, catalogues, on the Web and in advertising.
There’s also a drive to improve fit and quality, among other “behind the scenes” challenges. “We will continue to focus on the technical and functional layer of the brand,” Turney said.
“I mean, if we are telling sexy stories at Victoria’s Secret that do delight, excite and make you feel glamorous and sexy — but the bras don’t fit — we’ve got a real problem.”