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Victoria Secret vs. Aerie

Two retail giants battle it out for market share

in the women’s apparel space

Who wins will tell us less about profits and

more about what



As the largest lingerie retailer in the U.S., Victoria Secret

hardly needs an introduction.

The famed retailer opened it’s doors for business in 1977, six years after company founder, Roy Raymond, walked out of a department store befudled and disappointed by trying to buy his wife lingerie. Raymond reflects that he was “faced with

racks of terry-cloth robes and ugly floral-print nylon nightgowns…the department store saleswomen thought I was an unwelcome intruder.”Raymond spent the next eight years studying the lingerie market before opening the first shop with his wife, Gaye Raymond, in Palo Alto, CA. To open the store, Raymond borrowed $40,000 from his parents and $40,000 from a bank to establish Victoria’s Secret.

Raymond’s vision – To create a store in which men could feel comfortable buying lingerie.

To achieve that vision, Victoria Secret created a marketing model that is now legendary: seductive, too-perfect-to-be-human ‘Angels’ (VS’s name for their models), simmering advertisements, a runway show to make pros blush, and sultry, darkened storefronts.

And up until the last few years, this business model seemed to be working. But beginning in 2016, Victoria Secret began to steadily loose market share. In that same year, direct sales only grew 1.6% and fell by 7.4% in the last quarter of the year, typically

a high revenue period due to the holidays. Sales revenue continued to stagnate and drop in early 2017.

In November 2018, it was announced that CEO Jan Singer had resigned amid declining sales. The announcement came one week after CMO Ed Razek made the controversial comment that the company doesn’t cast plus-size models in its annual fashion

show “because the show is a fantasy.” After a 40% stock plunge in a single year, Victoria’s Secret announced in 2019 that it will be closing 53 stores in the U.S.

And on November 21, 2019 it was announced that Victoria’s Secret will no longer hold their annual fashion show. Executive Vice President, Stuart B. Burgdoerfe stated, “We think it’s important to evolve the marketing of Victoria’s Secret. There will be more to come as that continues to get evaluated.” 

So Where Are Women Shopping Instead?


In February 2006, American Eagle launched Aerie Lingerie, the company’s first sub-brand. The first stand-alone Aerie store opened in August 2006 and by 2018, Aerie was valued at $500 million, up from $200 million in 2017. The company is gunning for a $1 billion valuation over the next few years.

What’s driving Aerie’s growth?

In the spring of 2014, Aerie launched a body image campaign called AerieREAL that discontinues using supermodels and does not digitally retouch photos. The goal is to encourage positive self-image and body positivity. The AerieREAL campaign features models of various sizes, shapes and skin colors, along with showing their beauty marks and skin imperfections. They offer personlized shopping across the size spectrum which includes a “Real Girl Talk” hotline with style and fit experts. As part of this campaign, Aerie became the first national retailer to sponsor the National Eating Disorders Association (NEDA). Aerie is the leading sponsor of their national walks awareness program known as “NEDA Walk”. The initiative raises funds for educational programs and spreads awareness about eating disorders.





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