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Frederick’s Of Hollywood and Victoria’s Secret sell the same thing: lingerie.But Victoria’s Secret has dominated the marketplace, posting record sales every quarter for three years. Meanwhile, Frederick’s has struggled for more than a decade.
Frederick’s was founded by the inventor of the push-up bra. At one point, pin-up icon Bettie Page modelled its intimate apparel. The company filed for bankruptcy in 2001, and now, the company is launching a luxury lingerie line to try and stay relevant.
Analyst Brian Sozzi at NBG Productions offered us his insight on why the brand is struggling. The biggest difference?
Women feel their Victoria’s Secret purchases are investments they can use over and over (versatile bras and underwear.)
Frederick’s has made a business off one thing: sex.
“Frederick’s is asking customers to invest in sex during an economy with a 16.8 per cent underemployment rate,” Sozzi told us in an email. “The customer perceives Victoria’s Secret’s core offerings as more versatile, adding all sorts of benefits to how they appear in public and not just in the bedroom.”
Here are some other problems:
- Frederick’s is reliant on catalogues and hasn’t made its website a top priority. Victoria’s Secret has done a great job of transitioning into e-commerce.
- Victoria’s Secret is designed so mothers and daughters can visit together and find something they like. Frederick’s is only aimed at younger women, and mums are unlikely to take their teenage daughters there, Sozzi said.
- Frederick’s is avoiding promotions, while Victoria’s Secret smartly uses them to draw customers in.
- Victoria’s Secret captured the aspirational customer that Frederick’s is only now marketing to, Sozzi said.
Frederick’s needs to make major changes to its business model to really succeed. A few new products aren’t going to help the brand.
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