Key takeaways:

Victoria’s Secret is a rare example of a behemoth in public decline at a time when the industry it serves is booming. 30 per cent of newcomer Harper Wilde’s clients come from Victoria’s Secret.

The lingerie giant has missed out on lucrative opportunities to serve parents and cancer survivors — people who have undergone life changes that often lead to new habits and loyalties.

Victoria’s Secret has also lost out to upstarts who have capitalised on changing customer desires and have launched lines catering to different tastes and body shapes.

By the time Victoria’s Secret executives recognised how badly out of touch their brand has become with the zeitgeist, they had a mountain to overcome. In the age of #MeToo, the brand’s feathered fashion show of garters and push-up bras no longer seemed culturally relevant. To some, it was offensive.

At its annual meeting this week, the struggling lingerie brand’s parent company, L Brands, will argue that it has turned a corner. The company has cancelled the annual televised fashion show that has faced derision and its lowest ratings ever, brought in new brand leadership, closed dozens of stores and has pledged, if shareholders agree, to add three new independent directors to its board. Its stock has plummeted to $24 from nearly $100 in late 2015.

This comes after years of the brand ignoring their customers’ wishes, even after they signed petitions asking for special-needs products such as mastectomy bras. In a recent survey of Victoria’s Secret customers, Cowen & Co. found that fit and comfort were listed as their top priorities when buying lingerie. Sexiness was dead last.

L Brands, which still calls Victoria’s Secret “quite simply the sexiest brand in the world”, is slow to recognise fundamental shifts in its customers' expectations. Cowen analyst Oliver Chen wrote recently that recovery will require “years rather than months”. The brand has continued making what its customers call uncomfortable bras in too-small sizes, with a focus on pleasing men, rather than themselves. Customers and investors had to beg for the return of its popular swimwear.

L Brands declined to make an executive available for an interview as the company prepared for its annual meeting on Thursday. It earlier announced Q1 revenue of $2.63 billion, beating analyst expectations off the strength of its Bath & Body Works brand. Comparable sales at Victoria’s Secret dropped 5 per cent in the same period.

Victoria’s Secret, which still controls 50 per cent of the US market, is a rare example of a behemoth in public decline at a time when the global lingerie industry is booming. It’s hard to think of another apparel segment that offers as much opportunity to entrepreneurs that seem to multiply like those broomsticks in Fantasia. For instance, lingerie newcomer Harper Wilde estimates that 30 per cent of its customers come from Victoria’s Secret.

“This market is going to fracture,” says Kimberly Grabel, general manager and senior vice president of TellTale, a lingerie brand launched by apparel maker Chico’s. “This space has been so dominated by one company.”

TellTale uses a lingerie personality quiz to tailor their product offering. © TellTale

The newer lingerie brands that have won over Victoria’s Secret customers are predominantly female-led, and many found their niches in personal ways. L Brands has been managed by a mostly male board of directors, many of whom shared personal and business relationships with 81-year-old chief executive and founder Les Wexner.

Plenty of evidence has shown that brands with diverse leadership — especially at board level — are more innovative and more profitable. The success of Savage X Fenty prompted LVMH to launch its first luxury fashion house in three decades with Rihanna, while comparable sales at American Eagle-owned Aerie have grown by double digits for more than four consecutive years.

Bras for nursing mothers

Consider the lost opportunity of new mothers. Marketers shower pregnant women and new mothers with pitches for everything from housewares to skin care products, recognising parenthood as one of those life-altering times when people adopt new habits and loyalties. However, searches on the Victoria’s Secret website for “maternity bra” and “nursing bra” each result in nary a product to buy.

Last year in the US alone, 3.8 million babies were born, according to the Centers for Disease Control and Prevention. Each of those pregnancies could be counted on to sell at least a couple of bras for maternity and subsequent nursing. Victoria’s Secret had been sending those women to other brands, and some never returned. (I’m a perfect example. The last time I shopped in a Victoria’s Secret store, my teenagers were babies.)

Kala, a brand launched last September, recently added four maternity bra styles as well as postpartum underwear to its lineup. In her Savage X Fenty show last year, Rihanna cast a model so pregnant that she went into labour on the runway and left for the hospital.

Lingerie for survivors

When customers petitioned Victoria’s Secret to develop mastectomy bras, the company announced it would donate to cancer research instead. Millions of women have undergone mastectomies, a number large enough to create a lucrative market that newcomer Everviolet is plumbing. After founder Keira Kotler had a double mastectomy and breast restructuring at age 40, she tried on more than 200 bras over six months. They rubbed her radiation burns, jabbed into her newly sensitive underarms, or were the wrong shape for her implants. “When you have implants, they don’t really move, so it either fits or it doesn’t,” she says.

Everviolet specialises in mastectomy bras to meet demand from millions of women globally. © Everviolet

Bras are notoriously difficult to design. Larger cup sizes can require the literal equivalent of bridge engineering — they must lift an appendage that is cantilevered off the body — with materials that won’t pull, scratch, dig or shift around. After three years of development, a process Kotler compares to “rocket science”, the brand launched last October with eight styles from a bralette to a structured bra, all with no underwire. The size range will be extended this summer.

The prize is a market in the US that she estimates is worth $386 million annually. Roughly 12 per cent of the female population, which buys about four bras a year, will face breast cancer in their lifetime.

“We’re trying to make a bra for real women, not supermodels,” she says, noting that Everviolet bras are intended to accommodate all sorts of changes that women’s bodies undergo over time, including the torso weight gain and sagging that comes with ageing healthily beyond middle age. “We now have women who haven’t had surgery who wear our bras because they’re so comfortable.”

Intimates for non-supermodels

Perhaps the most significant market is women whose bodies don’t resemble those of Victoria’s Secret angels. Lingerie brands trying to compete are doing so in an increasingly crowded field, but one that appears to have room for newcomers as the market grows.

“I hated the process of shopping for bras,” says Harper Wilde co-founder Jenna Kerner, echoing a commonly heard refrain. “You’re looking at these tall models as pinups on the wall as you’re shopping.”

Kerner and her (female) business partner created a business plan and pitched their idea to — who else? — rooms full of male venture capitalists. So they made a short video putting the experience in the lens of what it would be like for men to deal with the same situation. In the comical video, a salesman offers an embarrassed-looking man a pair of underwear to augment his size. It helped them raise $2 million in a funding round led by Charles River Ventures, one of the US’s oldest venture capital firms.

The brand launched in 2017. One of Harper Wilde’s first products, a strapless bra, developed a 6,000-person waitlist. They offered free home try-ons to build a data set of sizes women wear. The result was 400 per cent year-over-year growth in their first year, which the company says it is currently on track to repeat.

In February, Harper Wilde added 12 new bra sizes up to 42F, with a supply in the thousands that they estimated would last three months. They sold out in one week. “We doubled our revenue that month,” Kerner says.

Harper Wilde have taken market share from Victoria's Secret with their inclusive sizing model. © Harper Wilde

The end of traditional ideas regarding sex appeal is a corollary to this story. Chico’s Grabel was exploring avenues to grow when ethnographers sent out to interview and shop with women realised their potential clients were disappointed at the status quo.

“This woman was not trying to be sexy for someone else, but she is super sensual,” Grabel says. Telltale, Chico’s first digital-only startup, is aimed at women roughly aged 25 to 40. Its website offers a personality quiz and connects those characteristics to lingerie styles. The “Creator” likes microfibre; the “Innovator” uses new lighter pad technology, and the “Dreamer” gets cotton lined with satin.

Photos on the website undergo minimal retouching. “You’re going to see nipples and tattoos,” Grabel says. That’s not to be sexy - it’s to be real.

“Lingerie historically is a woman’s product that’s made for men,” says Harper Wilde’s other co-founder Jane Fisher. “That was a really sobering thought.”

No more.

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