Victoria's Secret

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Victoria's Secret

founded: 1977

Contact Information:

headquarters: 3 limited pky.
columbus, oh 43230 phone: (614)415-8000 fax: (614)415-7278 toll free: (888)919-7555 url: http//


Victoria's Secret, owned by Intimate Brands, Inc., is the leading seller of intimate apparel, foundations, and related products for women of the ages 15 and older. The company operates 789 stores and distributes the Victoria's Secret Catalogue. This publication, with a record circulation of 426 million in 1997, is the premier catalog of intimate apparel and clothing. The catalog presents an inspirational lifestyle for women over the age of 18. Victoria's Secret distributes several innovative products aimed at developing women's self-esteem and beauty. The company's lingerie and clothing are made from the finest materials, providing the customer with comfort and quality.

Intimate Brands, Inc.'s primary subsidiaries are Victoria's Secret Stores and the Victoria's Secret Catalogue. In addition, Intimate Brands, Inc. owns Bath & Body Works, a leading retailer of bath items, and Gryphon, a maker of private-label perfumes and bath products. A private label manufacturer makes products for sale under another company's name. For example, Gryphon makes fragrances for the Victoria's Secret brand, among others.

Victoria's Secret is the number one mall-based retailer of women's lingerie. Intimate Brands, Inc. prides itself on being a leading retailer of intimate apparel and personal products, and with its 1,827 specialty stores and its catalog distribution the company continues to maintain its reputation for quality. Intimate Brands anticipated opening 85 new Victoria's Secret stores in 1998, including 35 freestanding Victoria's Secret Bath and Fragrance stores and 10 Victoria's Secret Hosiery stores.


Intimate Brands, Inc. has experienced explosive growth, more than doubling its sales in four years. Sales in 1992 were $1.3 billion and rose to $3.6 billion in 1997. Victoria's Secret's net sales for 1997 were $1.7 million. Comparable store sales (comparing sales from the same store) were up 11 percent from 1996 to 1997.

Intimate Brands enjoys a great deal of success with its subsidiaries, with Victoria's Secret providing the most revenue. Victoria's Secret stores provided 47 percent of total Intimate Brands, Inc. sales, and Victoria's Secret Catalogue provided 20 percent, for a combined total of 67 percent of total sales in 1997. In 1997 Victoria's Secret Stores conquered 14 percent of the $10-billion U.S. lingerie market. Victoria's Secret Catalogue controlled 6.5 percent of the U.S. women's-apparel catalog market in 1996.

The initial public offering of Intimate Brands' stock in October 1995 was at $17.00 per share. On March 31, 1998, the company's stock closed at $27.06 per share. In 1997 the company raised dividends 8 percent per share, and in 1998 the company announced another 8-percent increase in dividends to $.56 per share.


While Victoria's Secret is a premier retailer of women's lingerie, it is not without problems. In 1996 a disgruntled female customer filed a lawsuit against the company, claiming that male customers were offered a larger discount than females. The class-action lawsuit stated that the world-famous catalog offered her a smaller discount than a male co-worker. "She discovered the discrepancy," the lawsuit claims, "when the co-worker received what appeared to be an identical catalogue, but his offered a $25 discount on a purchase of $75 or more, while she was offered only a $10 discount." The lawsuit asked for a $15 reimbursement from the company for anyone who received the smaller discount, or the opportunity to purchase future merchandise with a $15 credit. The suit claimed that the company had discriminated in the past and, in addition, asked for an apology and unspecified damages.


Ron Raymond opened the first Victoria's Secret store in 1977 in San Francisco. The following year the first catalog appeared, luring consumers into the world of "Victoria"—a sensual, dreamy character who was a combination English romantic/modern feminist. In 1982 Raymond sold his company to The Limited, Inc. Within a few years the company grew from a $7-million operation to a 600-store retailer with a huge mailing list and sales of more than $2 billion.

Intimate Brands became incorporated on May 16, 1995. Three days later the new company acquired the assets and liabilities of Victoria's Secret stores, Victoria's Secret Catalogue, Bath & Body Works, Penhaligon's, Cacique, and Gryphon. In exchange, Intimate Brands issued The Limited, Inc. 210 million shares of Class B common stock. By the late 1990s The Limited, Inc. owned 83 percent of Intimate Brands, Inc.


Victoria's Secret is one of the top 10 brands in terms of customer loyalty. Company leaders feel that women want to buy into the romance of the Victoria's Secret lifestyle. President Nichols stated: "We are a lifestyle business. We want to be an integral part of our customers' lives. We are there for them. We don't intend to disappoint them." It is this philosophy that spurs growth and development, as well as the continued success of Victoria's Secret.

One of Victoria's Secret's continuing strategies is to immerse consumers in the Victoria's Secret lifestyle. The Victoria's Secret name was seen 1 billion times in print and other media in 1996. Television ads emphasize the company's glamour, showing top models in Victoria's Secret lingerie. The Annual Spring Fashion Show, held every February in New York, reinforces the company's image as a designer and is the most widely seen fashion event in the world.

Victoria's Secret customers buy three times as many bras as the average customer. Bras make up 20 percent of total sales in the Victoria's Secret stores. The company aggressively markets premium and unique lingerie, which are often copied by competitors. Due to the popularity of its bras, Victoria's Secret plans at least one major new bra campaign every year.

To increase sales to its already loyal customer base, Victoria's Secret offers specialty products. In 1996 the hosiery line was redesigned and hosiery-only boutiques opened—14 of them by the end of 1996. Specialty catalog sales grew more than 60 percent in 1996. These catalogs focus primarily on clothing and are offered in Country, City, and Swim editions.

To make the purchases of Victoria's Secret Bath & Fragrance products something more than an afterthought, the company separated these products from lingerie. In 1996 the sales force for the fragrances were made separate from the sales force for the lingerie. The fragrances were given their own store, which grew to 430 side-by-side stores located next to Victoria's Secret stores by the end of 1996 and 21 stand-alone stores by the end of 1997.

Part of the lifestyle immersion strategy of Victoria's Secret is a Special Occasion products line. Offering the ultimate in luxury, these non-apparel products are targeted to the core Victoria's Secret customer. The line's gift items, such as frames, shoes, and bedding, all bear the distinctive heart logo of Victoria's Secret.

FAST FACTS: About Victoria's Secret

Ownership: Victoria's Secret is a wholly owned subsidiary of Intimate Brands, Inc., which is a publicly owned company traded on the New York Stock Exchange. The Limited, Inc. owns 83 percent of Intimate Brands, Inc. stock.

Ticker symbol: IBI

Officers: Leslie H. Wexner, Chmn. & CEO, Intimate Brands, Inc., 1997 salary $1,000,000, bonus $1,861,560; Kenneth B. Gilman, Vice Chmn., Intimate Brands, Inc., 1997 salary $900,000, bonus $1,228,630; Grace A. Nichols, Pres. & CEO, Victoria's Secret Stores, 1997 salary $700,000, bonus $1,400,000; Cynthia D. Fedus, Pres. & CEO, Victoria's Secret Catalogue, 1997 salary $621,154, bonus $875,000

Employees: 43,900 (Intimate Brands, Inc.)

Chief Competitors: Victoria's Secret's competitors vary from small boutiques to large department stores. Any company that sells lingerie, gift items, hosiery, or fragrance and bath products is a competitor. In addition, any company selling lingerie and women's clothing through a catalog is a competitor. Primary competitors include: Frederick's of Hollywood; Maidenform; and Sara Lee.

In 1996 Victoria's Secret announced it would be implementing a new system to improve its warehouse merchandising. The chosen system was developed by MicroStrategy, the largest relational on-line analytical processing vendor. Victoria's Secret used the system to analyze inventory and manage market demand. The system enables Victoria's Secret to reduce out-of-stock instances on selected items from 20 to 5 percent by tracking daily movement figures and minimizing shortfalls. It also provides Victoria's Secret with geographical selling patterns. For example, the system was able to show that ivory-colored bras were purchased 10 times more often in Miami than in New York. This information is useful in developing the company's marketing strategy. By improving the in-stock situation, stores were able to avoid lost sales and more efficiently distribute the merchandise in the stores.


Victoria's Secret attributes much of its success to the number of women in leadership positions within the company. The president, a majority of the executive committee, nearly every merchant, and 80 percent of the sales associates are female, which gives Victoria's Secret a reputation as a women's business. According to Grace Nichols, president of Victoria's Secret stores, "We spend a lot of time talking about the needs of women today, and how we personally respond to things. We try to offer our customers glamour, beauty, fashion, and a little bit of romance." These efforts contribute to the continued popularity of the company.


Victoria's Secret's primary resource is its extensive line of lingerie. All items are sold exclusively under the Victoria's Secret brand. The Miracle Bra, available in satin or lace with adjustable straps, underwire, and removable pads, is one of the company's most popular items. The Perfect Silhouette Bra provides women with a comfortable fit and is not visible under clothing. Each bra retails for approximately $28 and provides the company with a substantial profit. Victoria's Secret offers other varieties of undergarments, including panties, garters, and panty hose. It also offers a vast selection of women's clothing and sleepwear, all of which are identified with the Victoria's Secret brand name.

In addition to clothing and undergarments, Victoria's Secret developed several products that fit in with the idea of a romantic lifestyle. The "Classics by Request" CDs and tapes, recorded by the London Symphony Orchestra, sold over 600,000 copies—unheard of in the classical music genre. Appealing to different fragrance preferences, "Victoria," "Rapture," and "Encounter" are perfumes that have sold very successfully. Victoria's Secret also offers its own line of bath and body products, available in many different floral and fruit scents.


Intimate Brands, Inc. supports hundreds of charities that reflect its associates' and customers' concerns. Most charities supported by the company involve women, children, education, and local communities. Organizations receiving funds include AIDS Pediatric Unit at Children's Hospital, Friends Helping Neighbors, Make-A-Wish Foundation, and the United Negro College Fund.

The American Red Cross organizes blood drives at the company's headquarters and in individual stores. Donations are also given to victims of natural disasters. The United Way receives continuous donations from Intimate Brands Inc.'s associates, which are matched by the company.

Since its inception Intimate Brands was ahead of the times with regard to suppliers. Its corporate policy of "What We Stand For" holds company executives and vendors to the highest standards. The company feels its success depends on treating everyone associated with Intimate Brands fairly and on offering consumers high-quality products.

Vendors who supply Victoria's secret with merchandise are expected to comply with all laws and regulations in the United States and other countries. Suppliers are to: "promote an environment of dignity, respect, and opportunity; provide safe and healthy working conditions; offer fair compensation through wages and other benefits; hire workers of legal age, who accept employment on a voluntary basis; and maintain reasonable working hours."


All stores are company-owned, and there are no plans to offer franchises. Despite its use of British spellings and the London address, Victoria's Secret only sells internationally through the catalog. Only Intimate Brands, Inc.'s subsidiary Bath & Body Works operates stores in Great Britain. As of early 1998, Intimate Brands expressed no interest in international expansion.



intimate brands, inc. home page, 28 april 1998. available at

"intimate brands, inc." hoover's online, 25 april 1998. available at

"intimate brands, inc." market guide company snapshot, 28 april 1998. available at

"intimate brands, inc." yahoo finance company news, 10 april 1997.

intimate brand's 10-k form, 28 april 1998. available at

"lawsuit alleges victoria's secret gives bigger discounts to male customers." source news & reports, san diego daily transcript, 3 january 1996.

"victoria's secret." alt.culture, 28 april 1998. available at http//

"victoria's secret selects microstrategy for enterprise merchandising rolap solution." microstrategy press release. vienna, va: microstrategy inc., 6 may 1996.

For an annual report:

on the internet at: http//:www.intimatesbrands.comor telephone: (614)479-6900

For additional industry research:

investigate companies by their standard industrial classification codes, also known as sics. victoria's secret's primary sics are:

2341 womens/childrens underwear

2342 bras, girdles, and allied garments

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Victoria's Secret

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