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Leslie H. Wexner doesn’t miss a detail.

An all-consuming curiosity and acute powers of observation for spotting slight shifts in popular culture and consumer behavior have enabled the chairman and chief executive officer of L Brands to take a groundbreaking fashion concept and morph it into a juggernaut, embracing fine fragrance, bath, body and personal care, plus home fragrance. The result: 2015 retail sales of an estimated $4.7 billion — one-third of the $12.15 billion grand total for L Brands sales.

This story first appeared in the June 8, 2016 issue of WWD. Subscribe Today.

To give that some perspective, the total American department store fine-fragrance business amounted to $4 billion in that same period, putting L Brands at the top of the U.S. retail pyramid of fragrance products. It also brought Wexner the Fragrance Foundation’s Hall of Fame Award, which he is due to receive June 7 at Lincoln Center.

Wexner struck a note of humility, taking his hat off to industry leaders — Lindsay Owen-Jones of L’Oréal, Leonard Lauder of Estée Lauder and Yoshiharu Fukuhara of Shiseido — who have helped him in the past and he considers to be more deserving of such an award.

“Whether it’s Fukuhara, OJ or Leonard — I think they really belong, and I’m just visiting. We sell fragrance and it’s an important part of our business, but fundamentally, I’m a shopkeeper.”

Lauder, who in his own right shaped much of the global modern prestige beauty industry, holds Wexner in much higher regard. “Les Wexner has always been the advance guard for so many things. His launch of Victoria’s Secret [after he bought the brand in 1982] set the stage for so much that has happened in the cosmetics industry. He deserves all the accolades we can give him.”

Elaborating on the significance of the Victoria Secret launch, Lauder continued, “It was a fringe thing, but he wound up making a full deal. He went from what people would normally do — taking a brand and putting it into department stores — to launching it in stores — freestanding stores. And he made it work.”

During a far-ranging interview with Wexner in his Columbus, Ohio, office, the conversation bounced from the reorganization of Victoria’s Secret to musings about new brands to the fact that color cosmetics are not for him [“a different base of supply, different thinking”], to historical notes — like the fact that the early shopping centers didn’t provide places to eat. Or how the invention of electricity had the biggest impact on the history of retailing. And the strategic importance of providing inviting bathrooms in stores to speculation on what changes will be wrought by the digitalization of everyday life. At one point, he observed,”in very broad ways, society hasn’t figured out how you deal with globalization. Governments haven’t figured it out, businesses haven’t figured it out, and we know it’s there.” That led to a momentary inquiry into the heart of the mystery of running a business internationally: “Certain brands have a positive perception globally and the amazing thing to me is the sameness of customer purchases globally — why people are buying fresh balsam candles in Saudi Arabia and Singapore and Toledo, Ohio.”

Then there’s that nagging problem that’s taking on renewed urgency: the loss of traffic in malls. Big retailers were the traditional traffic builders, Wexner began, slowly taking aim.

“The department stores’ traffic problem isn’t because of the mall,” he said. “The mall’s traffic problem is because of the department stores.” No surprise opinion there, given Wexner’s adversarial standing as the virtual inventor of modern specialty store retailing.

“In most shopping centers today, probably the biggest traffic drivers would be Victoria, Pink, Bath & Body, maybe Sephora and Apple,” Wexner said, referring to three of his chains.

“Pink gets constant increases and let’s say does about $1,400 a foot. So if there’s a mall traffic problem, is it the stores or is it the customer? I don’t think it’s a customer problem. We know we’re having increases in Bath & Body, steady increases in Victoria and in Pink. We know that Restoration Hardware and Crate & Barrel, home stores, certain beauty stores, certain accessory stores, certain categories are doing well.

“When a retailer doesn’t do well, I’d say — ‘well it’s traffic, it’s the environment, it’s the Internet, it’s catalogues, it’s Wal-Mart,'” Wexner continued. “I mean, there are always reasons. And generally it’s the merchandise, stupid,” he asserted. “And you got to run good stores.”

But he spoke with the greatest ease about observing consumer behavior, a knack that he developed into a science in building his original Limited apparel business into a dominant retail force.

He often describes himself simply as a “shopkeeper” — but one who was able to transfer his skills from one world to another.

“What I have thought about, and continue to think about, is that we are specialty merchants and our primary skill is knowing about women,” Wexner said.

“So then the question is…could you go from making apparel to lingerie, to beauty? It came from looking at our skills and saying, ‘Is there a specialty store or a specialist opportunity for a retail business that goes around fragrance?'”

He freely admits not knowing the technical side of manufacturing apparel or fragrance products, but he is always on the alert for new looks and new trends. Recalling an incident four or five years ago, he said, “I was in the Mideast and I saw stores that smelled different to me and it was oud. I had never heard of oud. So I thought ‘well, this is kind of interesting, I wonder whether a fragrance like that might sell,”‘ he said, referring to probably the most widespread recent trend in global perfumery.

“You have a lot of things that were unique or treated as fashion that have become commodities. The Internet does that. The prestige watch business, which arguably is a fashion business, has been commoditized because you can go online and shop for the best price in the world and you can order a watch and probably in 24 hours get one from any place in the world. The combination of global credit and global access takes something that’s unique and makes it a commodity.

“I was in Silicon Valley and with a lot of senior, grown-up people, not the Millennials. I was out there for a couple of days and it just struck me that they didn’t see it, but they all dress exactly alike — they all wear jeans, they all wear navy blazers, they all wear shirts without ties. If you’re a multimillion-dollar-a-year Silicon Valley executive, you dress like a civilian because you’re wearing jeans, but you’re wearing $2,000 brown leather Italian shoes,” he smiled. “That’s how you express your individuality.”

That kind of power to pick up on details empowered Wexner in opening his first Limited store in 1963, which changed the course of fashion specialty retailing. People talk revolution. But Wexner did it by offering wearable design at affordable prices on a national basis.

Speed and agility, along with a sharp eye for new looks, were the drivers. As the fashion business turned tougher in terms of cost, sourcing and value, Wexner gradually soured on the apparel category, shedding a number of fashion brands, and turned to the magnetic attraction of lingerie with the acquisition of a nascent Victoria’s Secret. Finally, he stepped into personal-care, fragrant body-care and home products, like candles, and traditional fragrance in 1990 with the advent of Victoria Secret Beauty and Bath & Body Works. The fragrances roughly fall into two groups, fashion scents themed to sell for a season, and fragrances designed to last as long they sell well. Two of the latter — A Thousand Wishes [which won the Fragrance Foundation’s Consumer Choice Award in 2015, Popular] and Japanese Cherry Blossoms — reportedly do more than $100 million, as BBW’s top two scents, each, according to industry sources. Another fragrance, Sweet Pea, is 16 years old.

“Long-term is easy,” Wexner remarked. “The short-term is harder. You have new ideas and then if people continue to buy it, we’ll continue to sell it.”

Other businesses include the huge Victoria’s Secret lingerie unit, Pink apparel, The White Barn Candle Co., Henri Bendel and La Senza.

Wexner’s strongest points are obvious to close students of the retailing game.

“He is endlessly curious and that’s what keeps him young,” said one market observer describing the 78-year-old Wexner. “It keeps him engaged, it keeps him ahead of everyone else. It allows him to reinvent business models in both content and execution.”

“There is no doubt that the U.S. stands out specifically because of how he has reinvented the whole way that consumers can enjoy and find fragrance and bring it into their lives,” said Felix Mayr-Harting, global head of fine fragrances at the fragrance supply company at Givaudan. “[There is] the development of the concept of specialty retail stores, which brings so much new choice and brings that level of innovation and speed of innovation.”

Karen Elliott, vice president of specialty retail sales at Givaudan, pointed to “the relevance of the fragrance that the consumer is looking for. They tap into exactly what the consumer is looking for and respond quickly to that.”

“His company is the biggest fragrance purveyor in America in 25 years,” said Jerry Vittoria, president of fragrance at Firmenich North America. “Consumers want to buy more than just perfume, they want to buy fragrance products and he sells them.”

Karen Grant, senior vice president and global beauty industry analyst at The NPD Group, traced the decline of the department store business in the late Nineties with the popularity of the fragrances and scented body products of BBW and Victoria’s Secret Beauty. “They came onto the scene and went head to head with the mainstay fragrances; as they got their groove, the department stores started to struggle.”

Part of Wexner’s success has been attributed to the vertical business model and manufacturing infrastructure adapted from the old fast-fashion operation. That means inventories can be balanced as managers have the freedom to allocate resources to the hottest-selling items. More margin allows the company to invest more money into the product in terms of quality of juice and packaging, according to industry sources, who testify to the quality. Such flexibility creates increased agility and flat-out speed in the manufacturing process.

A faster manufacturing process gives the marketing executives more time to get an early reading on how big a product will hit and they can adjust the final order. An industry observer noted, “If a weekend goes really well with one fragrance, by Monday they are placing orders and by Friday they have product on the shelf. It’s not quite that fast, but it’s almost that fast. Speed is his mantra.”

It has been estimated that L Brands develops and produces product at least twice as fast as the typical fragrance competitor. Wexner acknowledged that since the company doesn’t own its manufacturing and is free to order from the factory direct, “it gives us a little bit more agility and gives us, I think, some financial advantage.”

This model, coupled with a finely tuned facility to test product and read the consumer mood, has been refined by Wexner’s organization as it evolved from one product category to another.

“The fundamental skill that I think we have in our business — through apparel, through lingerie, through whatever — is knowing the customer, really knowing them, not in an analytical way. We have to know our customers the way we know our friends.

“But it wasn’t that simple,” Wexner said, noting that connecting the dots of the business can be vexing. “It isn’t magic, but you end up with a few knots.

“It’s a ton of experimenting, testing, and, I think, interpreting successes and also interpreting failures.”

“Then the question is, can we create primarily a store environment that can sell these things. We could experiment with a lot of designs of stores and fixtures till we thought we could figure it out.”

He added, “You’ve got to test things because you don’t want to make big mistakes. You can afford small experiments as long as you don’t blow yourself up.

“I’m still learning,” Wexner said. “When you’re in a fashion business, you can never know. If you know, you’re in the past. As soon as you know, it’s no longer relevant.

“Any industry that’s changing, you have to cultivate a culture of curiosity,” he concluded.

Then there are cases where Wexner thinks about taking another crack at an opportunity that may have gone sideways. He hinted during the interview that he thinks about the C.O. Bigelow personal-care brand, which included nine stores that carried an array of outside labels in addition to the store brand, which is still carried by BBW. The last two Bigelow stores closed in 2012. The original brand was launched in 2005.

“We continue to think about that,” he said, describing the stores’ original assortment as being made up of “boutique brands.” He paused, then said, “I thought it was a hell of an idea. We didn’t resource it and we were busy doing other things.”

Sources indicate the current scope of thinking is focused on revisiting the idea of a product line only.

L Brands recently had some turbulence, largely centered on poor performance by Victoria’s Secret, followed by a restructuring of the division. Noting that apparel brands can lose robustness after eight or 10 years, they have to be “reinvented, repositioned, rethought.”

Part of the problem was that the division — with its components of Victoria’s Secret, Victoria’s Secret Beauty, the Direct selling business and Pink — was bundled together in one organization from the beginning. “When we started, Pink was a small department,” he said, “and now it’s pushing at a $3 billion business. So it went from infant to adult. Each one of them are businesses in and of themselves and each one of them is an international business.”

A footnote from the past was an unconfirmed report that Wexner had once been in preliminary talks to buy the French-based Sephora perfumery chain, when it was just getting established in America.

When asked if he regretted not buying the business, he replied, “No. We looked at it maybe 10 or 15 years ago, but it was very, very expensive and they were primarily in the fine-fragrance business and it was struggling then.”

He also disputed speculation that LVMH Moët Hennessy Louis Vuitton wanted to sell the entire international business, describing the conversation as very preliminary.

“I won’t say they wanted,” he replied. “I’m not sure they wanted to sell and I’m not sure we wanted to buy. We were maybe sniffing a little. It was a short conversation. Put it that way. It wasn’t that much substance. It was like it’s an idea.”

But Wexner is now thinking about 2016 and a future of change.

“If there is something to leave people with, it is that it’s important that you know what has happened, you have a historical sense of where an industry or a category has been,” he said. “That’s hard but it’s foundational.

“In your business with a customer, what’s happening right now, we’ll look back tomorrow and we’ll call it history. There’s things that are happening and some people can’t see what’s really happening. They can’t interpret current events. They simply get it wrong.

“The more you know about the past and if you’re reasonably accurate with the present, the future tends to look exactly like the past,” he continued. “History is important, but it doesn’t repeat itself, it informs the future.

“Do I believe in retail?” he asked rhetorically. “Yeah, because for as long as there’s been recorded history, people have gone to the marketplace because they wanted to be with other people. We’re pack animals. Now whether the shopping center does or doesn’t have department stores, it’s like, ‘who cares?’ But what will they have? Is it a Whole Foods, is it a yoga studio, is it a shopping center of restaurants? But whatever it is that will get people to the marketplace will probably benefit rascals like us.”

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