Victoria’s Secret vs. La Senza
As Victoria’s Secret opens its first stand-alone store in the UAE, Kipp pits it against another international women’s fashion and lingerie brand. Once suing each other, they’re now related.
Victoria’s Secret was started by Roy Raymond, a Stanford Business School grad who felt embarrassed buying lingerie for his wife in a department store. He borrowed $40,000 from family and $40,000 from the bank, and within a year was earning $500,000 from his store which aimed to create a comfortable shopping environment for men. A mail order catalogue and more stores quickly followed. In 1982, after five years, he sold the company on for $4 million. Victoria’s Secret actually inspired the company behind La Senza. For getting there first, it gets the point.
La Senza is relatively young, at least in terms of brand. The actual history of the company goes back a bit further, to the sixties, when brothers-in-law Stephen Gross and Irving Teitelbaum opened the first Suzy Shier clothing store in a Canadian mall. The concept went on over the next 20 years to open around 70 outlets (with the help of some investment). The brothers then acquired a California based chain in 1984 and turned it into an expanding success; seeking further expansion and inspired by Victoria’s Secrets’ success they created the La Senza brand and first store in 1990.
Victoria’s Secret says it has 1,040 stores globally amounting to more than 6 million square feet of retail space. Net sales are more than $5 billion, according to the parent company’s website, and average sales per selling square foot are $581. But when we say globally, in actual fact almost all stores are in the US – international sales are mostly mail order or at a handful of airport stores. For lack of global expansion, despite having more stores total, VS loses out.
The La Senza brand boasts more than 300 stores in Canada, not to mention a further 466 stores in more than 48 countries. However, many of these stores operate under franchising, licensing and cooperation agreements (in the UK, for instance, the stores are owned by private equity firm Lion Capital). Net sales globally are $423 million across the 258 stores the brand directly owns. Sales space is 869,000 square feet, outing sales per selling square feet at $420.
The parent company of Victoria’s Secret is Limited Brands, which was started in 1963 by Leslie Wexner as a single store in Upper Arlington (Ohio, USA). His parents, who owned their own store, closed shop to throw in with their son. The firm grew and was listed on the New York stock exchange in 1969, and in the 80s and 90s made some major acquisitions, including VS in 1982. The company, which also owns Pink and Bath and Body Works among other brands, recorded sales in 2009 of nearly $9 billion.
This was news to Kipp: La Senza is actually owned by the same parent company as Victoria’s Secret. Not long ago that wasn’t the case – in fact there was a law suit between the two brands in 2006 (more on that later). But in this age of amalgamation and acquisition the inevitable happened: in 2007, Limited Brands bought La Senza. The deal was worth $628 million, an amount that was paid in cash, according to reports. This round is obviously a draw.
Victoria’s Secret may very well still be a secret to many in the Middle East. Sexy lingerie and conservative societies do not always mix, and this means expansion into the region will be slow, and is likely to be led by beauty and branded accessories. That’s what the new store in Mirdiff City Centre mall, Dubai, will be offering anyway. It opened this week, just two weeks after the brand opened its first Middle East store at Marina Mall in Kuwait.
You probably already noticed that La Senza has a strong presence in the Middle East. The brand boasts stores in Kuwait, the UAE, Jordan, Lebanon and even Yemen. In Dubai, La Senza has no less than 13 stores. It is well ahead of Victoria’s Secret in this region.
From the corporate site: “Visit one of the most powerful, sexy and glamorous stores in the world, Victoria's Secret, where you'll find a dazzling assortment of intimate apparel, beauty products, sleepwear, hosiery, and more.” Sexy and glamorous are the keywords here, with the brand one of the dominant players in the mid to up-market lingerie stakes. Victoria’s Secret has never made any secret of its highly sexualized merchandise, which has allowed it to establish a strong brand positioning.
La Senza, on the other hand, always set out to be a less sexualized version of Victoria’s Secret. “Our mission is to provide an outstanding lingerie presentation in a world class environment. La Senza provides customers with outstanding personal service, while combining quality, fit and value.” So says the website, but visit the online store and you get far more sexy than service. The corporate positioning may have allowed La Senza to penetrate conservative markets like the Middle East with more success than Victoria’s Secret, but obvious attempts to be sexy dilute that stated strategy and undermine brand positioning.
Victoria’s Secret has made itself a reputation for using supermodels to promote its products. In 1997 it kicked off this policy, and in the past 13 years has used models including Tyra Banks, Helena Christensen, Heidi Klum, Claudia Schiffer, Eva Herzigova, Miranda Kerr and Rosy Huntingdon-Whiteley. Kipp hates to be so shallow, but the use of such star names is part of the strength of the brand.
Just like Victoria’s Secret, La Senza uses high profile models to promote the brand. They have included Lauren Gold, Isabeli Fontana, Daniela Pestova, Sophie Anderton, and Rebecca Romijn. But for using British B-list celebrities including Tess Daly (a TV host), ex-soap actress Gemma Atkinson and model-cum-football pundit’s wife Danielle Lineker, it loses out.
Victoria’s Secret has never made any secret of its desire to retail “sexy” clothing. However, it’s toned down entry into the UAE market (fragrance and cosmetics only) shows that it can be respectful and savvy when it counts. While the brand has largely avoided controversy (aside from occasional reprimands for skinny models and risqué posters), its founder grabbed headlines in 1993 when he committed suicide by jumping from Golden Gate Bridge. His second business, My Child’s Destiny, had gone bankrupt seven years earlier.
Despite a brand strategy of being less overtly sexy than Victoria’s Secret, La Senza has come under fire for its marketing efforts and positioning. The company launched La Senza Girl in 2008, which was aimed at 5 to 12 year old girls. Critics said it was sexualizing children, but the brand said it was simply designing colourful underwear for them. The brand was also sued by Victoria’s Secret for copyright infringement in 2006 after launching a new bra, and by Eva Herzigova after refusing to pay for a photoshoot on the grounds she had cut her hair and lost weight.