Lingerie exec reveals method behind icon

CNY Business Journal (1996+), Feb 15, 2002 by Kropf, Annemarie

SYRACUSE - To the consumer, Victoria's Secret may seem to be just glamour, fashion, and models. But Wendy Burden, executive vice president of operations and administration, dispelled that myth with her recent speech at Syracuse University.

"There is a business infrastructure to support this so-called icon," she said.

Speaking as part of the Genet Lecture Series, Burden told her audience how the acquisition of one store led to the current 957 stores spanning the United States, and she revealed the choices the company made to get there. The scheduled speaker was Grace Nichols, CEO of Victoria's Secret Stores, but due to illness, Burden took over.

Victoria's Secret is part of The Limited, Inc. (NYSE: LTD), an enterprise with $7 billion in annual sales that includes The White Barn Candle Company, New York & Company, and Express. The Victoria's Secret brand alone contributes nearly $4 billion in annual sales. In 1982, Les Wexner, chairman of The Limited, Inc., was in San Francisco when he noticed a small lingerie shop. "It reminded him of a European boutique," Burden said. He acquired the store that same year.

"When we started, it was a highly promotional business," Burden said, explaining that each store showed price comparisons. "We relied on price strategy, word of mouth, and the catalog. It was truly a fly-by-the-seat-of-our-pants endeavor."

Though the company began nine years earlier, it wasn't until 1993 that Victoria's Secret ventured into national advertising. "Advertising allowed us to build our brand," she said. Along with advertising, the company also began focusing on public relations. "[Public relations] has done more for our brand than imagined," Burden said. "Advertising combined with PR really built the brand."

Having a targeted product focus also propelled the company to the forefront of the underwear market. "We can't be all things to all people," Burden said. "We had to pick what we're best at."

Burden said that bras weren't always the obvious choice. Visiting a Victoria's Secret store in its early days meant rummaging through items such as men's silk boxers, tea, jewelry, and picture frames. Being the best at picture frames, however, didn't seem to be a winning strategy, she added.

"When you look at the bra market, there are some pretty compelling reasons," she said. "It's a big market and continues to grow." In 1997, the bra industry was worth $3.7 billion, and today it is more than $4.5 billion. She adds that Victoria's Secret owns more than 20 percent of that market.

Client, loyalty and repeat purchases have helped the company over time. "Women will come back and buy the same bra over and over," she said. "if we can do well with bras, the rest will follow." Burden pointed out the company's sub-brand, Body by Victoria, made $100 million in sales its first year. Now in its third year, it's experiencing 20-percent growth.

Joint brand integration also plays a role in the company's success. Within Victoria's Secret itself, there are three different businesses - the stores; Victoria Secret direct, which includes the catalog and the Web site; and Victoria's Secret beauty. Joint brand integration means that the CEOs of each business all meet with Wexner to ensure the same visions.

"Three different businesses means nothing to clients," she said. "No matter where they get it from, they want it to look and feel the same."

Throughout the years, the company has increased its amount of product testing prior to a launch. "Before, we used it as a rearview mirror rather than headlights," she said. "It doesn't hurt to get a preview of how the product sells with the clients."

Along with video montages of the company's advertisements, and its appearances on television shows, Burden also offered up a question-and-answer session. This was where Burden revealed just who Victoria really is. "She's not a person or an embodiment, but an aspirational client envisioned for the brand," she said. "She's in her late 20s, has lived in Europe, has a job, and is very fashionable. She's a woman, not a girl, and is somewhat worldly and interested in traveling."

While Victoria will remain the same, the future of Victoria's Secret involves continuously improving the way the company does business. This involves innovation in marketing, Burden said.

"We'll continue to try and be smarter, better, and faster when it comes to marketing," she said. She mentioned the 2001 fashion show televised during prime time, and how it gathered publicity on other shows, such as "Entertainment Tonight."

"It was definitely pushing the envelope," she said. "We'll continue to push the marketing envelope forward."