The Tragic Story Behind Victoria’s Secret

The origins of American success stories.
Oct. 30 2013 12:57 PM

“Happy Ending, Right?”

The founder of Victoria’s Secret had a genius idea. But he couldn’t see just how far it could go.

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A Stanford MBA named Roy Raymond wants to buy his wife some lingerie but he's too embarrassed to shop for it at a department store. He comes up with an idea for a high-end place that doesn't make you feel like a pervert. He gets a $40,000 bank loan, borrows another $40,000 from his in-laws, opens a store, and calls it Victoria's Secret. Makes $500,000 his first year. He starts a catalog, opens three more stores, and after five years he sells the company to Leslie Wexner and the Limited for $4 million. Happy ending, right? Except two years later, the company's worth $500 million and Roy Raymond jumps off the Golden Gate Bridge. Poor guy just wanted to buy his wife a pair of thigh-highs.

—Sean Parker (Justin Timberlake) to Mark Zuckerberg (Jesse Eisenberg) in The Social Network (2010)

In this scene, Zuckerberg has just asked Parker why his girlfriend looks so familiar; turns out the woman on Parker’s arm is a Victoria’s Secret model. Parker, founder of Napster (and the first president of Facebook), is impressing upon young Zuckerberg that the true genius behind what he calls a “once-in-a-generation-holy-shit idea” isn’t necessarily the idea itself, but the insight, drive, and perseverance to see just how far the idea can go. There’s no better example to prove his point than the story of Raymond, Wexner, and Victoria’s Secret.

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In the mid-1970s, Roy Raymond did indeed walk into a department store to buy his wife lingerie, only to find ugly floral-print nightgowns—made even uglier under harsh fluorescent lights—and saleswomen who made him feel like a deviant just for being there. Realizing that other male friends felt the same way, the 30-year-old saw an opportunity to create a market where none existed: A lingerie store designed to make men feel comfortable shopping there.

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. In 1977, with $80,000 of savings and loans from family, Raymond and his wife leased a space in a small shopping mall in Palo Alto, Calif., and Victoria’s Secret was born.

To understand how novel Raymond’s idea was, it helps to have a little context. In the 1950s and ’60s, underwear was all about practicality and durability. For most American women, sensual lingerie was reserved for the honeymoon trousseau or the anniversary night; Frederick’s of Hollywood was the granddaddy of the specialty lingerie retailers. When the women’s movement of the late 1960s and ’70s called for women to liberate themselves from the bondage of bras, the intimate apparel industry responded with new designs that they claimed would give women the natural look they desired without the embarrassment of a sagging bustline. But for the most part, underwear remained functional, not fun.

Victoria’s Secret changed all that, and in the Bay Area, its sales continued to boom—thanks in large part to its catalog, which reached customers across the country. Within five years, Raymond had opened three more stores in San Francisco. By 1982, the company had annual sales of more than $4 million—yet something in Raymond’s formula was not working. According to management experts Michael J. Silverstein and Neil Fiske’s book Trading Up, Victoria’s Secret was nearing bankruptcy.

Enter Leslie Wexner, the man who had ushered in the mass-market sportswear boom with a store he called The Limited. While still in his 20s, Wexner had recognized that women were forgoing dresses for separates and casual wear. So in 1963, he opened a store “limited” just to sportswear. Wexner’s foresight paid off. The Limited grew to 11 stores by 1970, and 188 by 1977, according to a Forbes profile published that year. Wexner, now 40, was worth $50 million.

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