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.
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.
By the early 1980s, Wexner was looking to branch out into new brands. While visiting one of his Limited outposts in San Francisco, he stumbled across Victoria’s Secret. “It was a small store, and it was Victorian—not English Victorian, but brothel Victorian with red velvet sofas,” Wexner told Newsweek in 2010. “But there was very sexy lingerie, and I hadn’t seen anything like it in the U.S.” (A quick review of early Victoria’s Secret catalogs—you can check out a couple here and here—supports Wexner’s observation; despite elegant bras, panties and slips, the models look uncomfortably like Susan Sarandon’s high-end prostitute in Pretty Baby.)
Wexner quickly saw what was wrong with the Victoria’s Secret business model: In focusing on a store and catalog that appealed to men, Raymond had failed to draw a large following among women. According to Trading Up, Wexner surmised that women were about as uncomfortable in Victoria’s Secret as Raymond had been in that flourescent-lit department store.
Nevertheless, Wexner saw the company’s potential, and in 1982, he bought the stores and the catalog for about $1 million (not $4 million, as was reported at the time). His first step, Silverstein and Fiske wrote, was to study European lingerie boutiques, whose female customers approached lingerie as an everyday essential. Wexner returned home convinced that if American women had access to the same kind of sexy, affordable lingerie as their European counterparts, they, too, would want to wear it every day. He also saw a gaping hole in the intimate apparel market—next to no products that filled the gap between the luxury brands and the Maidenforms and Cross Your Hearts. Wexner envisioned “a La Perla for the mass market.” Finally, a new shopping environment—one that was inviting to women and fulfilled an attainable fantasy of glamour and luxury—would help create greater demand.
Wexner ultimately decided to create for the company what Ralph Lauren mastered the decade before him: A British-inspired aspirational world that the American consumer would clamor to enter. Gone were the dark woods and deep reds of the original stores; now, gilded fixtures, floral prints, classical music, and old-timey perfume bottles filled the space. Lacy bras and panties hung neatly under warm-hued lights. Even a London home address—No. 10 Margaret Street—was invented, even though headquarters were in Columbus.* The catalog, which had become modern and racy, was softened to reflect the new image, with models who looked like they had just walked off the pages of Vogue or Glamour. New products like the Miracle Bra became top sellers.
In short, women were buying, while men continued to ogle the catalog. Wexner’s plan was working. By 1995, according to Trading Up, Victoria’s Secret had become a $1.9 billion company with 670 stores nationally. As they continued to refine and tweak the company image (they abandoned the English-boudoir theme around 2000), Victoria’s Secret became the most popular apparel brand in the world today, according to YouGov BrandIndex, with a net income of nearly $5 billion.
Sadly, as Wexner’s and Victoria’s Secret’s success grew, Roy Raymond, despite his keen instincts, saw his life fall apart. After selling the company to Wexner, Raymond stayed on as president of Victoria’s Secret for about another year before leaving to open My Child’s Destiny, a high-end children’s retail and catalog company based in San Francisco. But, according to a New York Times article at the time, a poor marketing strategy (focused too much on attracting only well-heeled parents) and an even poorer location (little walk-in traffic) forced them to file a Chapter 11 petition two years later in 1986. The Raymonds ended up divorcing, and in 1993, Roy Raymond jumped to his death from the Golden Gate Bridge, leaving behind two teenage children.
Roy Raymond’s genius was recognizing the need to remove shame from the process of buying unmentionables. But much like the failure of Friendster and the old MySpace as Facebook began to reign supreme, his story reads like a cautionary tale of how a brilliant opportunity can be seized and yet missed. Wexner, on the other hand, had both vision and skill. He imagined a world where there was no such thing as an unmentionable, and figured out a way to make it so. He made sexy underwear commonplace, and convinced us that investing in what’s underneath our clothes is as necessary as the clothes themselves. The world and its skivvies would never be the same.