What Entrepreneurs Can Learn From The Creation Of Victoria's Secret
Victoria’s Secret has developed into a fashion titan, ruling the world of lingerie and acting as a conduit to the top for models. In 2012, the company sold $6.12 billion in product, and was the market leader for negligees.
The company’s progression has more than a few twists and turns, and the brand’s beginning is based on one man’s embarrassing shopping experience.
Roy Raymond, an alumnus of Tufts University with a master's from Stanford Business School, went shopping in ’69, searching for something for his wife. Something classy and elegant, both high quality and sexy. Unfortunately, he struggled in the department store, feeling unwelcome and awkward about approaching a sales professional for help.
"When I tried to buy lingerie for my wife, I was faced with racks of terry-cloth robes and ugly floral-print nylon nightgowns, and I always had the feeling the department-store saleswomen thought I was an unwelcome intruder." To Newsweek in ’81
After 8 years of paying close attention to the lingerie industry, with $80,000 in capital, loaned half from banks and the rest from family members, Raymond opened the first Victoria’s Secret store.
His goal was twofold: to change underwear from something that was solely “dowdy, practical and a foundational garment,” normalizing the use of lacy thongs and padded push-up bras, and to create an environment where men would feel comfortable searching for products for their wives.
The name, and design, of the store was based on the house that the couple lived in, says Roy’s wife Gaye, who is now associate professor of physical therapy at Samuel Merritt University in Oakland, California.
“The Victoria’s Secret we founded was an upscale sophisticated lingerie store that I designed to look like a Victorian drawing room, complete with Oriental rugs and antique armoires displaying the wares. I remember making the velvet curtains for the first changing rooms. We used a lot of silk and natural fibers in our lingerie, and it was very high quality.”
The company grossed $500,000 in its first year. Over the next couple years, this strong start allowed for expansion into four new stores in the San Francisco area, plus a mail order branch.
By 1982, it had grown to 6 stores, sent out a 42 page catalogue, and grossed $6 million a year. Raymond’s pet policy of targeting a male consumer audience, however, was leading the company to bankruptcy.
“My husband Roy had spoken to Les Wexner a few times about working together, but ultimately Roy felt he couldn’t share decision-making, and was happier getting out completely.” - Gaye Raymond
Roy Raymond sold his full stake in Victoria’s Secret to Les Wexner for $4 million, a figure that was initially not released. Most, looking back, think that this was significantly too small an offer for complete ownership of a company that grossed $6 million a year.
He went through a couple of business failures and I think he suffered depression. He borrowed a lot of money from his mother. He was trying to start another company but things didn’t go well, and he saw only one way out. It’s so sad, because he was young, creative, really a brilliant businessman, but he suffered setbacks and couldn’t seem to bounce back from them. He felt he couldn’t go on.” - Gaye Raymond
Raymond tried to start several other business ventures, including a store for children’s products called My Child's Destiny and also attempting hardware through mail order. He was never, however, able to recapture the success of his initial endeavor, and after going through divorce and bankruptcy, committed suicide by jumping to his death off the Golden Gate Bridge in ’93.
Victoria’s Secret has gone in the opposite direction since leaving Raymond’s direction, and has grown into the huge company with a massive social influence that we have today.
It’s no longer high-end fashion focused on fit, quality and fibre, but it’s now more popular, with a lower price and aimed at a far younger crowd. Roy and I used to have our regrets about how much it had changed from our original vision. Yet they’ve done a great job making it a commercial success.” - Gaye Raymond
The enduring legacy of Roy Raymond to all entrepreneurs is never to tap out too early; even if you are selling the controlling stake in your pet project, hold on to a piece. There is no guarantee that another idea of yours will be as successful, no matter how good it seems, and nobody wants to suffer seeing their brainchild be successful and not earning anything for the creator.
Top Photo Credit: Getty Images