Victoria’s Secret reveals gymwear collection, cashing in on a booming market that former staffers say it neglected for years because it felt ‘sweat is only sexy when you’re having sex’

Victoria's Secret new on point collection
  • Victoria’s Secret launched a new gymwear collection this week, featuring leggings and sports bras.
  • It’s part of the brand’s turnaround effort, during which it has also ditched its iconic Angels.
  • Former staffers said the old management team refused to sell sports bras, which were deemed unsexy.
  • See more stories on Insider’s business page.

Victoria’s Secret launched a new collection of gymwear this week, signaling it wants to take on Lululmeon and cash in on a booming market that former staffers say it neglected for years.

The new collection, called “On Point,” is modeled by one of the brand’s new spokeswomen, Olympic skier Eileen Gu.

It comprises a mix of leggings, sports bras, and other clothing in three different fits and fabrics. Victoria’s Secret said each fit is tailored to a specific activity: one for running errands, one for yoga, and one for high-intensity workouts.

Its “sweat” leggings, recommended for high-intensity sports, cost $60, while sports bras across the collection cost between $40 to $50.

A post shared by Victoria’s Secret (@victoriassecret)

The push into gymwear is a major shift in strategy for the lingerie giant, and is part of its turnaround effort under a new management team.

It ditched its iconic Angels earlier this year, saying they were no longer “culturally relevant.” At the time, it said that it would partner with activists and entrepreneurs for its new image.

Read more: POWER PLAYERS: Meet the 8 Victoria’s Secret executives helping the company shake off years of scandal and slumping sales

In recent interviews with Insider, former longtime senior employees said that under the leadership of former L Brands CEO Les Wexner, and CMO Ed Razek, the company had missed key market opportunities – including athletic wear.

“If it wasn’t a push-your-boobs-up-to-your-chin bra, they didn’t want anything to do with it,” one woman who worked in a management role at Victoria’s Secret’s New York office for more than 12 years told Insider.

“To them, sweat is only sexy when you’re having sex,” she said of their refusal to sell sports bras.

This potentially cost the company market share as brands such as Lululemon and American Eagle’s Aerie grew in popularity. Victoria’s Secret’s market share dropped from 33% to 24% between 2016 and 2018.

The founder of Lululemon, Chip Wilson, revealed in his book about the story of Lululemon, “Little Black Stretch Pants,” that Victoria’s Secret once made an offer to buy his brand in the early 2000s.

“We were flattered, but it didn’t take us long to agree that wasn’t a direction we wanted to go,” he wrote in his book.

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Victoria’s Secret is working with former Angels even as it drops scantily dressed models for activists and entrepreneurs

Victoria's Secret ditches its Angels
Angels at the Victoria’s Secret runway show in 2018.

  • Victoria’s Secret will keep working with some former Angels, its new creative director told the New York Post.
  • It’s abandoned the Angels concept but some former Angels will still model for the brand.
  • Victoria’s Secret is in the middle of a major rebrand after years of struggle.
  • See more stories on Insider’s business page.

Victoria’s Secret will continue to work with former Angels even after it abandoned the concept last month, its new creative director has said.

In an interview with The New York Post, Raúl Martinez said: “The word Angel is retired but that doesn’t mean the women we worked with as Angels are retired.”

Martinez told the Post that at least three former Angels will continue to model for the brand, including 25-year-old Taylor Hill, 24-year-old Grace Elisabeth, and 52-year-old Helena Christensen.

Victoria’s Secret announced in June that it was scrapping its Angel brand because it was no longer “culturally relevant.” It said that instead, a group of seven activist and entrepreneurial women – including Indian actor Priyanka Chopra Jonas and the professional soccer player and gender-equality activist Megan Rapinoe – would become spokeswomen for the brand.

This announcement was part of the brand’s major overhaul under a new management team.

Read more: POWER PLAYERS: Meet the 8 Victoria’s Secret executives helping the company shake off years of scandal and slumping sales

Martinez took on the position of creative director at the start of the year and has been tasked with bringing the brand to life visually. He works closely with the design and marketing teams and has the final say over anything from what photographers Victoria’s Secret hires to shoot campaigns, to what fonts it uses in its ads.

The name Angel was first coined in 1999, when models Helena Christensen, Karen Mulder, Daniela Peštová, Stephanie Seymour, and Tyra Banks appeared in an ad to promote the Angels underwear collection.

In the late 1990s and early 2000s, the Angels and the annual Victoria’s Secret runway show had a powerful role in defining “sexy” in the modern day. More recently, it has been criticized as outdated and out-of-touch.

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Iconic luxury department store Harrods will now rent you clothes from high-end designers, and $1,000 dresses cost $20 a day

Harrods
The window display at Harrods in London’s Knightsbridge.

  • UK luxury department store Harrods will now let shoppers rent designer clothes.
  • Prices start at $8 a day to rent a designer top. There is a four-day minimum rental period.
  • Dresses that would normally cost more than $1,000 to buy can be rented for about $20 a day.
  • See more stories on Insider’s business page.

One of the world’s most iconic luxury department stores, Harrods, has joined a growing list of retailers joining the fashion rental market.

London-based Harrods has partnered with a UK fashion rental marketplace My Wardrobe HQ to let customers rent the designer brands sold at its Knightsbridge store.

Prices start at $8 a day for a minimum of four days to rent a designer top. Dresses that would normally cost more than $1,000 to buy can be rented for about $20 a day.

According to Business of Fashion, Harrods will provide the stock and My Wardrobe HQ will handle the logistics and marketing. Customers can rent the clothes via My Wardrobe HQ’s website or in its pop-up location at the Harrods store.

The fashion rental business is booming, spurred by companies such as Rent the Runway launching subscription-based services for customers to rent clothes. Increasingly, retailers have been partnering with clothes-rental sites or launching their own services, such as Urban Outfitters’ Nuuly.

For Harrods, it’s a way of using last season’s inventory that was stuck in stores over the pandemic.

“There have been many spectacular collections and stand-out pieces that haven’t had the chance to be seen or celebrated, so offering these pieces to our customers to rent for their next event is a way of giving these products a new life,” Harrods fashion director Lydia King told WWD.

“Our fashion customers have more weddings, birthdays and other celebrations than ever before, and the joy of event dressing is back,” she said.

Read the original article on Business Insider

Gap could shutter even more US stores after closing 81 in the UK, analysts warn. ‘We’re in for some radical right-sizing.’

A Gap employee packs shopping in a bag while a customer pays
Gap is closing its UK stores.

  • Retail analysts are worried that Gap will be forced to close even more stores in North America.
  • Gap said Wednesday that it’s shuttering all its 81 stores in the UK and Ireland.
  • One analyst also said that Gap’s new Yeezy and Walmart lines smacked of “desperation.”
  • See more stories on Insider’s business page.

New York, Paris, Milan, London: the fashion capitals of the world. The four cities are home to the flagship stores of every clothes retailer with designs on the global market.

Yet Gap, the international retail icon famed for its laid-back American style, will soon be gone from London: it said this week that it’s closing all its 81 stores in the UK and Ireland. And in Paris and Milan, Gap’s future is uncertain: it’s in talks to offload some or all of its French and Italian businesses.

It’s no secret that Gap has been closing stores in North America for years amid falling sales. There were 552 Gap stores in the region at the end of May this year – precisely half the number there were a decade earlier, company figures show. In October last year, it set out plans to shutter 350 Gap and Banana Republic stores in North America by 2023.

However, retail analysts interviewed by Insider said that Gap’s drastic action in Europe this week signaled that even more stores will need to be shuttered across North America. They also said that the company needed to completely rethink what it’s doing in the US.

“I don’t see them closing all their US stores by any means,” said Natalie Berg, an independent retail analyst. “But I think we’re in for some radical right-sizing. The uncomfortable truth is they still have way too many stores.”

Berg said Gap stores were “no longer fit for purpose.”

“They can’t just be about selling clothes any more,” she said. “You need to give shoppers a reason to ditch their screens; give them an experience they can’t get online.”

Insider has approached Gap for comment.

From September, Gap will be online-only in the UK and Ireland. Berg said: “Lots of clothes retailers are doing the same thing, so now you have all this competition online. You have to ask: is online becoming a digital graveyard for failing brands?”

Maureen Hinton, an analyst at GlobalData, agreed that there was “probably more to go” for Gap’s store closure programme in North America.

She said: “Gap is really struggling to find its own identity – and it has been for a long time.”

Hinton said that Gap needed “a much stronger strategy” for the US, focusing on “what its brand identity is all about – who it’s targeting and how it’s going to do it.”

“It’s got Yeezy at one end and it’s doing things with Walmart at the other,” she said. “That sounds like desperation.”

Gap is banking on a collaboration with Yeezy, Kanye West’s fashion brand, to help reinvigorate its fortunes. The first Yeezy Gap product dropped last month: a limited-edition, bright blue, recycled nylon puffer jacket with a price tag of $200.

Gap’s new tie-up with Walmart is less flashy. The new Gap Home line, sold exclusively in Walmart stores, features a $43 stoneware dinner set and a $20 tie-dye shower curtain.

Shoppers in London won’t get to buy any of these things.

Around midday on Thursday, only a few dozen customers were browsing hoodies, jeans, baby clothes, and other apparel on the four floors of Gap’s UK flagship store on Oxford Street, the heart of London’s shopping district.

Amanda, 24, who shops at the store every few weeks for herself and her three-year-old daughter, said she hadn’t heard it was being shut down. “I wore Gap stuff when I was a kid – my mum put me in it,” she said. “She used to come here too. That’s really sad.”

Read the original article on Business Insider

Victoria’s Secret ditched its Angels after a successful decades-long partnership. Take a closer look at how the concept was born – and why the lingerie chain thinks Angels are no longer relevant.

Victoria's Secret Angel Alessandra Ambrosio
Alessandra Ambrosio walks the runway during the 2017 Victoria’s Secret Fashion show in Shanghai.

  • Victoria’s Secret Angels have been synonymous with the lingerie brand for decades.
  • However, as part of an extreme brand turnaround, the lingerie label is bidding them farewell.
  • But how did Angels come about? Insider tapped into the history of the tradition since its inception.
  • See more stories on Insider’s business page.
This month, after nearly two decades, Victoria’s Secret confirmed that it is ending its Angels brand.

miranda kerr victoria's secret fashion show 2012
Victoria’s Secret Angel Miranda Kerr walks the runway during the 2012 Victoria’s Secret Fashion Show at the Lexington Avenue Armory on November 7, 2012 in New York City.

Its CEO Martin Waters said that the Angels were no longer “culturally relevant” and would not be a part of the brand as it undergoes a major turnaround effort.

Instead, it has taken on a group of seven new spokeswomen – a mix of activists and entrepreneurs to promote its new image.

Priyanka Chopra Jonas
Priyanka Chopra Jonas.

This includes actress and entrepreneur Priyanka Chopra Jonas and soccer player and gender-equality activist Megan Rapinoe. 

Read more: Victoria’s Secret’s new CMO on how the brand’s radically different new image will help it win back disillusioned shoppers

So how did the concept of an Angel first come about and why is it being abandoned?

Victoria's Secret old
Victoria’s Secret’s first Angels.

Models Helena Christensen, Karen Mulder, Daniela Peštová, Stephanie Seymour, and Tyra Banks were the first Angels.

The name was coined in 1997 after they appeared in an ad to promote Victoria’s Secret’s “Angels” underwear collection.

From then on, the Angels became an elite group of models that were carefully selected to become the face and voice of the brand.

Victoria's Secret old

Since the late 1990s, these Angels have become one of the most well-known parts of the brand.

Though there have been hundreds of Victoria’s Secret models over the years, many of which have walked its runway show, not all have made it to the elite status of an Angel.

Victoria's Secret Angels
Victoria’s Secret Launches “Angels 2000” Bra. Daniela Pestova, Stephanie Seymour, Karen Mulder, Ines Rivero.

Through their contracts with Victoria’s Secret, they were required to be featured in campaigns, talk shows, and runway events.

Victoria’s Secret was previously vague about how their contracts worked and what they are actually expected to do.

Elsa Hosk, a former Victoria's Secret Angel
Elsa Hosk wears The 2018 Dream Angels Fantasy Bra at The Plaza Hotel Palm Court on November 5, 2018, in New York City.

But reports indicate that being an Angel requires a big commitment of time and responsibility.

“Becoming an Angel means you are officially part of the family of Victoria’s Secret,” Elsa Hosk said in an All-Access video back in 2015

“You are a spokesperson for the whole brand, and that is such a cool thing because it’s one of the biggest, most amazing brands in the world,” she said. 

Angels get to go home with multi-million dollar pay cheques.

Adriana Lima
Adriana Lima.

Although it is unclear how much angels are paid year on year, many were among some of the world’s highest-paid models. As previously reported by Insider, 11 of the 17 women on Forbes’ list for The Highest Paid Models 2016 have been Victoria’s Secret Angels. 

World-famous models including Gisele Bündchen and Adriana Lima, who hold a superior status with the brand, have finished years with multi-million-dollar salaries, per Insider. In 2018, Bündchen earned $30.5 million and Lima $10.5 million, but other Angels, including Taylor Hill and Jasmine Tookes took home $4 million. 

 

But the level of commitment has meant that Victoria’s Secret has lost Angels in the past.

Karlie Kloss, during her time as a Victoria's Secret Angel
Karlie Kloss pictured (R).

As previously reported by Insider, Doutzen Kroes and Karlie Kloss both pulled out of contracts early to focus on other commitments.

Sources highlighted to Page Six that relatively little pay over time was also a factor in Angels’ decision to depart. “Older contracts like Alessandra Ambrosio used to be in the millions, now they’re like $100,000,” a source told the outlet. 

There have been 41 Angels in total since 1997 when Christensen, Mulder, Peštová, Seymour, and Banks were first taken on.

Tyra Banks
Tyra Banks walks the runway at The Victoria’s Secret Fashion Show at the 69th Regiment Armory November 9, 2005 in New York.

Banks was the first black model to become an Angel.

Over the years, these women became a defining part of its increasingly elaborate runway shows and risque brand image.

Gisele Bundchen at the 1999 Victoria's Secret Fashion show
Gisele Bündchen walks the runway at the 1999 Victoria’s Secret Fashion show.

In 1999, its annual fashion show aired for the first time online and was described as the internet-breaking moment of that time after 1.5 million people tried to tune in and crashed the site.

The year after that, Angel Gisele Bündchen walked the runway in what was then the most expensive item of lingerie ever created, a $15 million diamond-and-ruby-encrusted ‘Fantasy Bra.’

Gisele Bundchen wearing the $15 million Victoria's Secret 'Fantasy Bra'
Gisele Bündchen.

The tradition to wear a “Fantasy Bra” at every runway show came about in 1996 when Claudia Schiffer wore a diamond-encrusted bra that cost $1 million. 

The shows became more lavish over the years.

Taylor Swift performs at the Victoria's Secret fashion show in 2014
Taylor Swift performs at Victoria’s Secret fashion show in 2014.

From popular musical acts including Taylor Swift and Kanye West, elaborate costumes and historical venues, to models sporting ornamental Angel “wings,” that can take up to 400 hours of labor, down the runway, the shows became a yearly attraction for many.

Carrying the wings was no easy feat.

Victoria's Secret Angel Alessandra Ambrosio
Alessandra Ambrosio walks the runway during the 2017 Victoria’s Secret Fashion show in Shanghai.

One year, Angel Alessandra Ambrosio revealed in an interview on “Late Night With Seth Meyers,” that she wore one of the heaviest pairs of wings in history in 2011, weighing around 60 pounds, per Insider

Some of the world’s top supermodels including Gigi Hadid and Kendall Jenner were among the catwalk’s line-up but never made it to Angel status.

Kendall Jenner walks the runway at the 2018 Victoria's Secret Fashion Show
Kendall Jenner walks the runway at the 2018 Victoria’s Secret Fashion Show.

Between 2016 and 2018, Victoria’s started to lose market share and its racy brand image. Angels were viewed as being increasingly out-of-touch and out of date in the wake of the #MeToo movement.

This came to a head in 2018, just weeks before its annual fashion show was due to air on television.

Ed Razek
Ed Razek.

Ed Razek, the marketing chief and brains behind the show, caused a backlash after he made controversial comments about plus-size and transgender models in an interview with Vogue.

Read morePeople slammed Victoria’s Secret after its marketing chief made controversial comments about transgender models, but he didn’t resign. This could be why, according to former executives.

When the show aired on TV, viewership numbers sank by 34%.

victoria's secret ed razek
Razek speaks to the 2018 Victoria’s Secret runway models backstage during the 2018 Victoria’s Secret Fashion Show.

The year after, for the first time since it launched in 1995, the show was canceled just after Razek left the company.

The Angels stayed on and in early 2019, a new Angel was announced – Barbara Palvin.

Barbara Palvin
Barbara Palvin.

At the time, fans praised Victoria’s Secret for selecting a more body-positive model, though she wasn’t plus size.

Over the course of 2020, the company underwent some major changes.

Les Wexner

Its longtime leader Les Wexner stepped down and it began the hiring of a brand new executive team. This included a new marketing head and creative director.

And under new leadership, the brand is refocusing its image.

Victoria's Secret
A Victoria’s Secret store in the UK.

“We’re moving from what men want to what women want,” CEO Waters said about the company’s repositioning, in a recent earnings call. “From sexy for a few to sexy for all.”

“It’s about including most women rather than excluding most women and being grounded in real life, rather than mostly unattainable,” he said.

And that apparently means no Angels. 

 

Read the original article on Business Insider

The rise, fall, and comeback of Victoria’s Secret, America’s biggest lingerie retailer

victoria's secret
  • Victoria’s Secret is the largest lingerie retailer in the US, and has been for several decades.
  • It achieved explosive success in the late 1990s and 2000s but has been accused of losing relevance in recent years.
  • The company is currently overhauling its brand image, and has abandoned its Angels for activists and entrepreneurs.
  • Here’s the story of the rise, fall, and subsequent comeback of the brand.
  • Visit Business Insider’s homepage for more stories.
Victoria’s Secret was founded in 1977 by American businessman Roy Raymond.

roy raymond
Roy Raymond (left).

Inspired by an uncomfortable trip to a department store to buy underwear for his wife, Raymond set out to create a place where men would feel comfortable shopping for lingerie. He wanted to create a women’s underwear shop that was targeted at men.  

He named the brand after the Victorian era in England, wanting to evoke the refinement of this period in his lingerie.

Victoria Secret vintage catalog 1982

His vision was summed up by Slate’s Naomi Barr in 2013: “Raymond imagined a Victorian boudoir, replete with dark wood, oriental rugs, and silk drapery. He chose the name ‘Victoria’ to evoke the propriety and respectability associated with the Victorian era; outwardly refined, Victoria’s ‘secrets’ were hidden beneath.”

He went on to open a handful of Victoria’s Secret stores and launched its famous catalog. 

By 1982, the company was making more than $4 million in annual sales, but according to reports, it was nearing bankruptcy at the time. It was at this point that Les Wexner swooped in.

Les Wexner
Les Wexner (center).

Wexner, who founded L Brands (formerly Limited Brands) was already making a name for himself in the retail world as he gradually built up an impressive empire.

By June 1982, Limited — which had previously acquired Express and Lane Bryant — was listed on the New York Stock Exchange. One month later, under Wexner’s leadership, the company acquired Victoria’s Secret’s six stores and its catalog for $1 million. 

Wexner turned Raymond’s vision on its head, creating a store that was focused on women rather than men.

Les Wexner

He was closely following the European lingerie market of that time and wanted to bring this aesthetic to the US. So, he set out to create a more affordable version of European upscale brand “La Perla” — lingerie that looked luxurious and expensive but was affordable.  

And it worked. By the early 1990s, Victoria’s Secret had become the largest lingerie retailer in the US, with 350 stores nationally and sales topping $1 billion.

Victoria's Secret runway show
Victoria’s Secret spring lingerie collection in New York Tuesday, February 6, 1996.

Source: The Telegraph

The brand began to cement its image over the next few years. In 1995, its famous annual fashion show was born.

Ed Razek
Ed Razek.

The show, which was run by Ed Razek (longtime chief marketing officer of L Brands), became an iconic part of the brand’s image. 

Razek and his team were responsible for hand-picking the models to walk the show. Because of this, he became one of the most important people in the modeling world, helping to launch the careers of Gisele Bündchen, Tyra Banks, and Heidi Klum.

 

In 1999, the show aired for the first time online. Time described it as the “internet-breaking moment” of this era after 1.5 million viewers tried to tune in and crashed the site.

Victoria's Secret
Model Tyra Banks the Victoria’s Secret fashion show Wednesday, Feb. 3, 1999 in New York.

Source: Time

Meanwhile, the brand was also launching some of its best-known and most successful products, including its heavily padded Miracle Bra and Body by Victoria.

Body by Victoria was a “blockbuster success” and more than doubled the sales volume of any other bra that Victoria’s Secret had previously launched, Michael Silverstein wrote in his book, “Trading Up.”

Around this time (1997), the idea of the Victoria’s Secret “Angel” came into play after a commercial featuring Helena Christensen, Karen Mulder, Daniela Peštová, Stephanie Seymour, and Tyra Banks ran to promote its “Angels” underwear collection.

Victoria's Secret old

From then on, the term “Angel” become synonymous with the brand.

Throughout the ’90s and early 2000s, its commercials featured heavily made-up and scantily dressed Angels.

Victoria's Secret ad 1997

Razek hired the best photographers and television directors in the world to make commercials for the brand. 

The runway shows became more lavish. In 2000, model Gisele Bündchen walked the runway in what was then the most expensive item of lingerie ever created, a $15 million diamond-and-ruby-encrusted ‘Fantasy Bra.’

Gisele

It’s been tradition for an Angel to wear a “Fantasy Bra” at every runway show since 1996. These change each year.

In 2000, Sharen Jester Turney came on as CEO of Victoria’s Secret Direct, heading up its catalog business.

Sharen Jester Turney

According to reports at the time, Turney wanted to remove the “hooker looks” in the catalog and made the aesthetic more like Vogue than Playboy.

She became CEO of the whole brand in 2006. Under her nine-year tenure, the company thrived; sales increased by 70% to $7.7 billion.

Sharen Jester Turney and VIctoria's Secret models

Source: Business Insider

Turney abruptly stepped down in 2016 and was succeeded by Wexner as interim CEO.

Sharen Turney

Wexner made a series of quick and fast changes: killing the catalog, swimwear, and apparel to focus solely on lingerie, the core part of its business.

He also split the brand into three — Victoria’s Secret Lingerie, Victoria’s Secret Beauty, and Pink — and recruited a CEO for each division.

Jan Singer became CEO of Victoria’s Secret Lingerie in September 2016.

Jan Singer

Between 2015 and 2018, sales began to falter.

Victoria's Secret

Victoria’s Secret was slow to adjust to a shift from padded and push-up bras toward bralettes and sports bras, missing out on a major fashion trend. 

More body-positive underwear brands such as Aerie, ThirdLove, and Lively cropped up, taking making share.

Aerie
Aerie.

Victoria’s Secret was accused of failing to adapt to the times.

Between 2016 and 2018, its market share in the US dropped from 33% to 24%. Some shoppers complained that the quality of its underwear had slipped.

Victoria's Secret

Source: Business Insider

One of its biggest assets, teen-centric brand Pink, also began to struggle. Sales slipped, and it resorted to heavy discounting to woo shoppers.

PINK

“We believe Pink is on the precipice of collapse,” Jefferies analyst Randal Konik wrote in a note to investors in March 2018, commenting on the level of promotions in store.

Some parents complained that Pink was being brought down by Victoria’s Secret’s over-sexualized ads.

Its annual fashion show drew criticism for being outdated, and viewership slipped. In November 2018 Razek sent the internet into a frenzy after he made controversial comments about transgender and plus-size models.

Victoria's Secret

Razek said in an interview with Vogue that he didn’t think the show should feature “transsexuals” because the show is a ‘fantasy.” “It’s a 42-minute entertainment special. That’s what it is,” he said in the interview.

victoria's secret ed razek
Ed Razek speaks to the 2018 Victoria’s Secret runway models backstage during the 2018 Victoria’s Secret Fashion Show at Pier 94 on November 8, 2018 in New York City.

Razek made a formal apology online but some of his critics called for him to step down. 

Read more: People slammed Victoria’s Secret after its marketing chief made controversial comments about transgender models, but he didn’t resign. This could be why, according to former executives.

Less than a week after Razek’s comments went viral, Singer resigned.

Jan Singer

Source: Business Insider

Singer was replaced by John Mehas, who took over the role at the start of 2019.

Victoria's Secret runway show 2018

Mehas had his work cut out for him. Same-store sales at Victoria’s Secret were down 3% in 2018, and was gradually losing market share to new companies. 

Plus, he had angry shareholders to deal with. In March 2019, activist shareholder Barington Capital sent a letter to Wexner, laying out recommendations to improve growth at Victoria’s Secret in order to “unlock substantial value.”

In the letter, Barington’s CEO, James A. Mitarotonda, called out the company’s brand image as being “outdated.”

“Victoria’s Secret’s brand image is starting to appear to many as being outdated and even a bit ‘tone deaf’ by failing to be aligned with women’s evolving attitudes towards beauty, diversity, and inclusion,” he wrote. 

Read more: An activist shareholder is urging Victoria’s Secret parent to update ‘tone-deaf’ brand image to boost sales

Barington called out the lack of diversity in its board of directors as being an issue for the brand. At the time, of the 11 board members, nine were men.

Les Wexner
Wexner and his wife Abigail both sit on the board of directors.

It seems Victoria’s Secret took this criticism to heart. After acknowledging the letter in a statement, it appointed two new female board directors — Sarah E. Nash and Anne Sheehan — and made steps to address the comments about the brand image being outdated. 

It hired a more body-inclusive model.

Barbara Palvin

While she is not a plus-size model, fans praised the company for its decision to take on Hungarian model Barbara Palvin as one of its newest Angels.

Instagrammers celebrated a post starring Palvin for being more body-inclusive, as they perceived her to be curvier than some of the brand’s other models.

“This model actually looks healthy..& I’m loving it!” one Instagram user wrote.

“At last! A real human body,” another said.

It also hired its first openly transgender model.

Valentina Sampaio

Brazilian transgender model Valentina Sampaio, shared a photograph of herself on Instagram in August tagging the Victoria’s Secret Pink brand along with the hashtags: “campaign,” “vspink,” and “diversity.”A day later, she shared a video of herself with the caption “Never stop dreaming.”

Her agent later confirmed that she had signed a contract with Victoria’s Secret.

The same day, Wexner announced that Razek would be resigning in the middle of August in a memo sent out to employees.

leslie wexner ed razek
Les Wexner and Ed Razek pose backstage at the 2016 Fragrance Foundation Awards presented by Hearst Magazines – Show on June 7, 2016 in New York City.

Source: Business Insider

And on November 21, the company confirmed that it had officially canceled its runway fashion show that year.

VS fashion show

During a call with analysts after reporting its third-quarter earnings results, L Brands CFO Stuart Burgdoerfer responded to a question about whether the fashion show would run this holiday season. 

“We will be communicating to customers, but nothing similar in magnitude to the fashion show,” he said. 

Wexner previously told employees in May that Victoria’s Secret was “rethinking” the show. And Victoria’s Secret model Shanina Shaik — who has walked in several of its fashion shows — told The Daily Telegraph in Australia in July 2019 that the annual show was off this year. 

While these were potentially positive changes, the brand found itself caught up in a new challenge in the summer of 2019: its CEO and the company being linked to convicted sex offender Jeffrey Epstein.

Epstein/Wexner
Waxner and Epstein

Epstein managed Wexner’s money for several years, and former company executives told the Wall Street Journal that he tried to meddle in Victoria’s Secret’s business, offering input on which women should be models.

Some of Epstein’s victims came forward saying that he used his connection to Victoria’s Secret to coerce them into sexual acts.

L Brands’ board of directors announced that it had hired an outside law firm to review its relationship with Epstein. In September, Wexner addressed his ties to Epstein at L Brands’ investor meeting.

“At some point in your life we are all betrayed by friends,” Wexner said. “Being taken advantage of by someone who was so sick, so cunning, so depraved, is something that I’m embarrassed I was even close to. But that is in the past.”

Read more: Former employees reveal what the billionaire head of Victoria’s Secret is like as a boss as he faces backlash over his ties to Jeffrey Epstein

In February 2020, the company announced that Wexner would be stepping down as chairman and CEO of L Brands but would stay on as chairman emeritus and sit on the board of directors. At the same time, it announced that it was selling a 55% stake in Victoria’s Secret to private equity firm Sycamore Partners.

Les Wexner painting

In a statement to the press announcing the news, Wexner said that Sycamore has “deep experience in the retail industry and a superior track record of success,” and that it “will bring a fresh perspective and greater focus to the business.”

 

In March 2020, the coronavirus pandemic swept across the US and Victoria’s Secret was forced to shutter its stores.

Victoria's Secret

At the end of April 2020, Sycamore filed a lawsuit to back out of the deal, alleging that Victoria’s Secret’s actions taken during the pandemic to close stores, cut back on new inventory, and not pay rent for the month of April were in violation of the agreement that the two parties had made in February.

L Brands immediately issued a statement saying that a termination of the agreement is “invalid,” and that it would “vigorously defend” the lawsuit and “pursue all legal remedies to enforce its contractual rights.”

On May 4, 2020, L Brands announced that the deal with Sycamore had officially fallen apart.

Victoria's Secret

L Brands said that it had come to a “mutual agreement” with Sycamore to “terminate” the deal.

The company also said that it had reshuffled its management team and would focus on “implementing significant cost reduction actions and performance improvements at Victoria’s Secret.”

This included permanently closing as many as 250 Victoria’s Secret and Pink stores in the US and Canada in 2020.

 

 

In the second half of 2020, the brand started to recover, boosted by more sales online.

Victoria's Secret

Jefferies analysts described Victoria’s Secret’s progress as “admirable,” after it reported strong fourth-quarter results in early 2021. 

Bloomberg later reported that L Brands had resumed discussions to sell the brand once more and was seeking a much higher valuation, in the region of $3 billion.

But in May, L Brands put an end to speculation and said that it was no longer looking for a buyer and would split the company in two and spin-off Victoria’s Secret to become a standalone company.

 

 

 

Since then, it has been working hard to execute a turnaround under new leadership.

Victoria's Secret

Read more: Victoria’s Secret is experiencing a major comeback after years of declining sales — and Wall Street is salivating

It has also taken steps to overhaul the brand image. Most recently, swapping its Angels for a new group of activists and entrepreneurial women to be the face of the brand.

Priyanka Chopra Jonas
Priyanka Chopra Jonas.

Read the original article on Business Insider

Victoria’s Secret is finally raising its prices after years of extreme deals on inexpensive lingerie

Victoria's Secret
Promotions were a mainstay in Victoria’s Secret stores in the past.

  • Victoria’s Secret is cutting back on discounts and raising prices, according to a UBS report.
  • The firm has been criticized for its constant promotions, which are thought to erode profit margins.
  • Less discounting and higher prices are crucial for its turnaround effort, analysts say.
  • See more stories on Insider’s business page.

Victoria’s Secret is cutting back on deals and raising prices, and Wall Street is on board.

In a note to clients this week, UBS analysts Jay Sole and Mauricio Serna reiterated their recommendation to buy L Brands stock (the parent company behind Victoria’s Secret) and shared data that showed the level of promotions in Victoria’s Secret stores – which includes its Pink brand – was “declining at a surprisingly fast rate.”

UBS said the average price of an item listed on Victoria’s Secret’s website in May 2021 was $44, a huge 83% increase from May 2019.

It also found that a quarter of the products on its site were on sale in May 2021. This is still a substantial number but a notable improvement on the level of promotions over the past four years, which floated around the 40% to 60% mark.

“This boosts our confidence that the Victoria’s Secret turnaround is real,” these analysts said.

Read more: The rise and fall of Victoria’s Secret, America’s most famous lingerie retailer

Unsatisfied customers

Victoria’s Secret has been strongly criticized by Wall Street in the past for constant promotions in stores. Analysts said these not only erode profit margins but also dampen the brand image and make it almost impossible to encourage customers to pay full price.

It wasn’t uncommon to see 40%-off sale signs littered around its stores between 2018 and 2019, and underwear deals such as five pairs of panties for $28. And major discounts of this kind are usually a sign that retailers are looking to clear unwanted inventory.

In 2019, the company promised to cut back on these promotions and tighten inventory levels but shortly after, discounts began to creep back in. At the time, UBS analysts said that price increases could be putting off customers, causing Victoria’s Secret to go back on its progress.

Victoria’s Secret’s price points have been a contentious subject as some shoppers previously said they felt the brand was still overpriced despite all the deals and discounts. And others said the quality of the clothing didn’t match these price points.

But Victoria’s Secret’s growth over the past few quarters – same-store sales were up 9% in the first quarter of the year versus 2019 and operating income, a measure of profitability, increased by $213 million or 665% – indicates that consumers are becoming comfortable paying more for its apparel and lingerie and that it has a better handle on its inventory levels.

Gabriella Santaniello, analyst and founder of retail research firm A-Line Partners, told Insider that the pandemic enabled Victoria’s Secret to have a “reset,” and cut back on its inventory, which has facilitated more full-price sales, she said.

More inclusive marketing pays off

The company has made considerable changes to its marketing in the past year. And experts say efforts to update its brand image, which critics previously said was out-of-date and oversexualized, have also helped to boost sales.

The marketing is “more subtle and appropriate,” Neil Saunders, managing director of GlobalData Retail, told Insider. It has “fewer sexual overtones and focuses more on more on celebrating women. That has resonated and has pulled some shoppers back to the brand,” he said.

Victoria's Secret
The Victoria’s Secret ad campaigns of 2021 look very different from the past.

And it matches up to what’s shown in stores, Santaniello said: “For example, they recently brought in plus-sized mannequins, which reflects their use of plus-sized models in their advertising.”

Still, the company needs to keep this “360 focus” long-term, she said. “They need to make sure they do not waiver because it will come across as inauthentic and that’s why they haven’t really been successful with the turnaround over these past few years.”

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Kanye West was spotted wearing the new Gap Yeezy jacket and Nike shoes – but he still has 5 years left on his partnership with Adidas

Kanye West at 2008 Grammy awards
Kanye West at 2008 Grammy awards

  • Kanye West stepped out wearing Nike shoes and his newly-announced Gap x Yeezy jacket last week.
  • West has a partnership with Adidas, which controls the site his Yeezy shoes are sold on, per Bloomberg.
  • Some social media users speculated he could be signalling an end to his Adidas deal by wearing Nike.
  • See more stories on Insider’s business page.

Kanye West wore Nike shoes when he stepped out in the newly announced first product of his Gap and Yeezy collaboration.

West, who founded the apparel brand Yeezy, was spotted out on June 3 wearing Nike shoes and a bright blue puffy coat. A week after the photos were taken, Gap announced the $200 coat would be the first product created in collaboration with Yeezy.

West and Adidas announced the two would partner in 2013, in a deal reportedly worth $10 million at the time. Bloomberg reported Yeezy has a valuation of $3.2 billion to $4.7 billion, per investment bank UBS, due to the lucrative partnerships with Gap and Adidas. The partnership with Adidas, Bloomberg notes, runs through 2026.

Social media users pointed out the Nike shoes, and speculated whether he was in breach of the Adidas contract or announcing an end to the partnership.

West has ownership over the Yeezy brand, but Adidas operates the website his shoes are sold on. Yeezy x Adidas sneaker sales amounted to $1.7 billion in 2020, according to Bloomberg, netting West with $191 million in royalties.

West’s first sneaker, the $245 limited-edition Air Yeezy, was released in collaboration with Nike in 2009. The shoe later sold on the resale market for thousands of dollars, and a prototype of the shoe with a value of more than $1 million could become the priciest sneakers ever sold.

Some analysts and insiders consider Yeezy one of the most influential sneaker brands ever, reportedly inspiring the now-popular shoe brand Allbirds, Insider’s Mary Hanbury reported.

Nike, Adidas, and a representative for Kanye West did not immediately respond to a request for comment.

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Etsy plans to spend $1.6 billion buying Depop, a social shopping app that’s helping teens get rich. Some Depop sellers pull in $300,000 a year – here’s how to make money on it.

Depop
Depop is a social shopping app targeted at Gen Z shoppers.

Instead of spending weekends or school holidays washing dishes and waiting tables, entrepreneurially minded teens are launching mini businesses to earn money online.

Depop app
The Depop app.

This is largely thanks to new apps that enable young shoppers to buy or sell secondhand clothing and accessories.

Depop, which launched in Milan in 2011 and has quickly gained a cult following around the world, is one of them. 

Depop is easy to use, which is one of the reasons it’s so successful.

Depop
Downloading the Depop app.

Depop has amassed more than 30 million customers in 150 countries since launching in 2011.

First, you need to download the app.

Depop
The landing page on the app.

Depop counts companies such as Poshmark and ThredUp as its competitors, and has been described as a mix between eBay and Instagram.

Depop will then ask you to create a username, link the account to your email address, and add a photo that represents your brand.

Depop
Setting up your shop.

Unlike rivals such as Poshmark or eBay, there’s more of a communal aesthetic on Depop and sellers are primarily listing streetwear, vintage, or late 1990s/early 2000s fashion. 

You’ll need to describe the style of your brand and what you’re planning to sell.

Depop
Explain what you’re selling.

This description will appear just under your username on your personal page. You can also link to your Instagram page to promote yourself more.

Next, you set up your billing address details and link your account to your PayPal. This is where all payments are handled.

Depop
The process is fairly straightforward.

You also have the option to register as a business and add in the relevant tax details. 

It’s as simple as that.

Depop
Now you can list your first item.

You’re ready to go.

Once you have a profile, you can start listing new items for sale.

Depop
Catchy photos pay off.

Depop advises sellers to post at least four photos and a video to give the item its best chance of selling.

You select the category that the item falls under.

Depop
There are 14 categories in total.

These are umbrella categories, such as menswear, womenswear, or sports equipment, for example. You can add a more detailed description of the item in another box, however.

The seller must cover the cost of shipping each item.

Depop
Depop uses Hermes courier in the UK.

In the UK, for example, the seller can either choose to do this process entirely on their own or pay to use a Depop recommended delivery company.

If you’re shipping internationally, you need to set the price yourself. 

Lastly, add the price of the item you’re listing.

Depop
There are no set guidelines for pricing.

There are no set guidelines for pricing, but sellers are advised to benchmark their prices against other products listed on the app.

Depop charges a 10% fee on each item sold.

Depop
Sellers will lose 10% of what they earn on each item.

This 10% is taken off the total transaction amount, which includes the cost of shipping. 

Customers can like, comment on, or save an item to their profile, much like you can on Instagram.

Depop
It has an Instagram-like setup.

They can also leave reviews and rate the seller. This feedback appears on the sellers’ profile page. 

Etsy said Wednesday that it was buying Depop for $1.625 billion as it looked to expand its reach to the Gen Z market.

Depop
Depop is known for being popular with Gen Z shoppers.

90% of Depop’s users are under 26 and it has its sights firmly set on this consumer base.

The company says its mission is to empower young shoppers to disrupt the fashion industry and give them the chance to become entrepreneurs.

Emma Rogue, Depop Seller
Emma Rogue (@emmarogue_ on TikTok) runs the Depop shop Shop Rogue

“This company is for the next generation,” Rachel Swidenbank, vice president of marketplace at Depop, previously told Insider. 

And for some, selling on Depop is a lucrative hobby.

Emma Rogue Depop
Emma Rogue lists a Y2K Fuzzy Animal Print Minibag on her Depop for $22.50

Swidenbank said that some users pull in as much as $300,000 a year selling on the app

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Gwyneth Paltrow is Rent the Runway’s newest board member – but she’s never used the clothes-rental service

Gwyneth Paltrow Getty Images
Gwyneth Paltrow joins Rent the Runway’s board.

  • Gwyneth Paltrow is joining the board of directors at clothes-rental service Rent the Runway.
  • Paltrow told The New York Times that she’s never used Rent the Runway.
  • “I’ve got my welcome code in my inbox, so I’ll soon be trying it out,” she told The Times.
  • See more stories on Insider’s business page.

Gwyneth Paltrow, actress and founder of lifestyle brand Goop, is joining the board of directors at Rent the Runway, the clothes-rental service. The news was first reported by The New York Times.

Paltrow told The Times that she’s never actually used Rent the Runway.

Rent the Runway started in 2009 as a way to rent one-off items for special events. It’s grown into a platform for people to rent everyday clothes instead of buying new ones. It has also added kids’ clothing and homeware rentals, via a partnership with West Elm.

“What’s fascinating is that, in my own way, I’ve been renting the runway for years,” she told The Times. “Borrowing a dress from a designer for a single moment at a premiere or an awards show, then giving it back afterward. Now I guess everyone is doing it. But I’ve got my welcome code in my inbox, so I’ll soon be trying it out.”

Read more: EXCLUSIVE: Rent the Runway CEO Jennifer Hyman, one of the most successful female founders, is fighting to save her company

Rent the Runway CEO Jennifer Hyman is hoping to tap into Paltrow’s entrepreneurial expertise. Critics say some of Goop’s products and recommendations, including its $66 vaginal jade eggs or bee venom therapy, are backed by unsubstantiated health claims, but Paltrow has built the brand into a $250 million empire.

“Gwyneth’s keen understanding of consumer psychology and unparalleled ability to tap into and define the cultural zeitgeist will play a key role in propelling Rent the Runway forward in a post-pandemic world,” Hyman said in a LinkedIn post this week, adding that the two have known each other for longer than a decade.

Rent the Runway started in 2009 as a way to rent one-off items for special events, and it’s grown to become a platform for renting everyday items as an alternative to buying new clothes. It has also added kids’ clothing and homeware rentals, via a partnership with West Elm.

Pre-pandemic, CEO Jennifer Hyman was prepping it to become the “Amazon Prime of rental” by diversifying into new areas. But when the pandemic hit, people went off the idea of renting clothes. It wiped $250 million from the company’s valuation, and Hyman was forced to close its stores and lay off or furlough half of its staff.

Read the original article on Business Insider