What's up guys and welcome back to wall street millennial on this channel, we cover everything related to stocks and investing one thing: we've seen time and time again is big iconic brands dominate their industries and bring in billions of dollars of profits only to be brought to Their knees by mismanagement, negligence or simply changing public tastes, companies like general, electric ibm, sears and kodak. These were all iconic superpowers of their times. Ibm was a tech dwelling on the level of google. Today, cirrus was as admired as present-day amazon and general electric and kodak were industrial powerhouses that earned insane profits for decades, but for one reason or another, they all lost their edge and now operate as second-rate companies.

At best, we've made videos on why each of these companies fell from their lofty heights, so make sure to check them out if you haven't already, but today we're talking about another such corporate decline, one in an industry, unlike anything we've ever covered before on this channel Victoria's secret victoria's secret is perhaps the most recognizable american lingerie retailer from its high present storefronts and prime retail locations across the world. It's highly effective marketing over the past half a century and its iconic victoria's secret fashion show you'd be hard-pressed to find someone who's unfamiliar with the brand, but the brand wasn't always so recognizable. Victoria's secret was founded in 1977 by roy and his wife gay raymond. They founded the store after he felt frustration at the experience of trying to buy lingerie for his wife.

At the time, lingerie was seen as a burlesque product. In a more conservative society, it was hard to buy without some level of judgment, especially for men buying for their wives or girlfriends. The raymonds founded the store in palo alto, california, focusing on mid-price lingerie. It was named after queen victoria to bring a sense of class and refinement to the brand.

The brand was successful at first, but wasn't immediately groundbreaking. After five years the raymonds had opened a total of five stores doing about six million dollars in sales in 1982. The raymonds decide to sell their brand to leslie or les wexner. Les wexner is a businessman from ohio who owned limited stores inc.

He paid just one million dollars for victoria's secret at the time wexner immediately breathed new life into the brand. He turned the company to focus on creating a sexy and appealing brand. That was, at the same time glamorous and tasteful. He targeted female customers and did everything he could to bring out the feeling of class and luxury wexner, also promoted victoria's secrets, catalog business.

The catalog was an important part of the company's marketing, as it allowed potential customers to see models in victoria's secret lingerie from the privacy of their own homes, by using attractive photos of models that many normal people wanted to. Look like the catalog helped victoria's secret become a household name and recognizable women's underwear brand within just a few years of wexner taking the reins. The company had become the undisputed leader in the industry throughout the 90s, the company's revenue and profits grew rapidly, but wexner didn't sit still in finding new areas for growth for the company. He expanded the company into cosmetics and fragrances industries, perfumes and makeup were natural products to go with underwear and customers bought it in 1995, victoria's secret started the victoria's secret fashion show in new york.

This annual show was a promotional event meant to showcase supermodels called victoria's secret angels in lingerie. The show enjoyed incredible viewership with millions of people watching every year, although its original purpose was to showcase victoria's secret merchandise. It became a popular cultural phenomenon with an almost cult-like following, however, with the aggressive, promoting and highly visible marketing of the brand wexner walked a fine line between losing the appeal of the brand to a perception of being too blindly sexual in 2000 sharon terney, the new Ceo of victoria's secret told forbes that the brand was losing its upscale reputation. She was concerned that the victoria's secret catalog was becoming a substitute for playboy magazines, and the cleavage in the company's marketing was losing the sense of class that it once enjoyed.

Despite this, the company continued in that direction. In many ways, the short-term growth in sales from capitalizing on the sex appeal of their models was too irresistible for the company to pass up in 2002 victoria's secret expanded into the lower cost market for lingerie, targeting younger women and girls, with their pink line. This line sold lingerie, swimwear, sleepwear, casual clothing and beauty products. The idea was to capture a wider customer base than the higher priced main lines and eventually convert the younger pink customers into customers of victoria's secret.

It was financially successful, reaching a billion dollars in sales by 2010, but had the long-term consequence of diluting the perception of the main victoria's secret brand line, because pink stores were frequently co-located with victoria's secret stores, the young and comparatively cheap. Looking stores and merchandise of pink pulled down the aura of victoria's secret, adult women with more money to spend, started thinking of victoria's secret, less of the classy expensive brand harkening back to the victorian era and more of a slightly higher end version of pink. A number of controversies also eroded victoria's secrets brand. In the 2010s, a research paper from several researchers at wilfrid lawyer university and the university of waterloo in canada found that socio-cultural norms for physical appearances, such as those seen by many as perpetrated by brands like victoria's secret, are harmful for the self-images of women.

This was thrown in the public spotlight in 2014, when the company rolled out the so-called perfect body campaign, critics said that this ad campaign perpetuated, unrealistic and toxic body standards for women. Eventually, a petition for the company to remove the campaign gathered tens of thousands of signatures and the campaign was finally taken down, but the bad publicity from the fiasco made permanent damage to the reputation of the company. The company also has a troubled history involving accusations of racism, discrimination and sexual harassment within its offices. For example, in 2020, one shareholder accused the company of fostering a toxic culture of sexual harassment, discrimination and retaliation.

He said that he was disturbed by the company's history of bullying and harassment. In 2019, a high up female executive at the company monica mitro said that the company's chief marketing officer, ed razik, had repeatedly harassed her verbally during his time there. After this, she was reportedly put on administrative leave by the company in what was seen by many as retaliation. Although the company said that the decision to put her on leave was made before her public comments, they eventually settled with her for an undisclosed amount.

Eventually, all these factors started having an effect on victoria's secret sales. Revenue at the company started falling in 2016 and continued through 2018.. In 2018, the company's ceo resigned. The company announced that it would be closing several stores cancelling the iconic fashion, show after two decades and bringing in new management in key roles in 2020, les wexner, the man who built up the brand into what it is today stepped down.

As the chairman and ceo of victoria's secret's parent company l brands in early 2020, just weeks before the coven 19 pandemic gripped the world l brands announced it had agreed to be bought by the private equity firm, sycamore partners. The deal valued the brand at about a billion dollars. Investors hoped the sale would allow l brands to focus more on its other major business bath and bodyworks bath and bodyworks had been leading victoria's secret in sales growth for l brands for several years, even as victoria's secret sales were tanking in 2018 and 2019. The relative outperformance of bath and body works saved l brands from making significant net losses, but by the second half of 2019, even bath and body works.

Couldn't save l brands by itself by selling victoria's secret ill brands hoped to be able to focus on its more promising business, while new leadership from sycamore partners could attempt to revitalize victoria's secret. However, within one month of the deal being announced, the kovid 19 epidemic was declared a pandemic by the world health organization and spelled doom for retailers across the world. Victoria's secret was not the least retailer to be affected by the widespread stay at home. Orders sycamore partners used the pandemic as an excuse to scrap the entire deal with l brands.

This was seen as a devastating blow to all brands, since they are just on the cusp of handing off all their woes related to victoria's secret with the deal scrapped. They also had to deal with a once in a century pandemic. However, through the pandemic, l branch has seen a remarkable comeback due to the real strides and management at victoria's, secret and rebranding the company, as well as continued strength in bath and body works. Analysts became increasingly bullish on the prospects of both businesses.

Martin waters, the new ceo of victoria's secret said that the company got it wrong. Unquote. He admitted that victoria's secret lost relevance with the modern woman. Instead of focusing on looks and glamorizing traditionally beautiful bodies.

He stressed the importance of women's own needs and wants the company also recently unveiled the vs collective, which is a group of seven women who will serve as ambassadors and brand advisors, including soccer star megan, rapinoe, size, 14 model, paloma, el sister, actress, bianca, chopra and more. The company also announced a new female dominant board of directors. The ambitions of turning around the company led to analyst upgrades of l brands and renewed optimism on the victoria's secret brand. In the middle of 2021, l brands announced that it would allow victoria's, secret and bath body works to grow separately as two separate companies, victoria's secret was split from l brands in the summer of 2021 and started trading under his own ticker symbol vsco in august with The new stock new, ceo and new outlook, the company hopes to reclaim the glory achieved in the 90s and 2000s.

It remains to be seen if it can rebuild a brand that suffered controversy after controversy, alright guys that wraps it up for this video. What do you think is the biggest reason that victoria's secret lost its edge? Let us know in the comments section below, if you enjoyed this content, don't forget to hit the like button and subscribe, so you don't miss future videos in the meantime. Thank you. So much for watching and we'll see in the next one wall, street millennial signing out.