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To Victoria’s Secret’s Goliath, Lingerie Start-ups Play David

The market for lingerie is dominated by a single player: Victoria's Secret. Now, a crop of new start-ups are targeting the space.
True & Co's 'uniform' basics line | Source: True & Co
By
  • Lauren Sherman

NEW YORK, United States — Founded in 1977 by Roy and Gaye Raymond and sold to Limited Brands in 1982, Victoria's Secret changed the way women shop for underwear. The ultra-feminine furnishings and pink walls of the branded boutiques provided a sanctuary for women who dreaded heading to the back corner of a department store to try on the basic and unflattering products they offered. "Mass merchandisers were offering commodity bras," said David McGoldrick, an analyst at Euromonitor International. "Aesthetically, there wasn't a lot going on for brands like that. Victoria's Secret made buying bras another way of dressing up. It offered women a new way to boost confidence."

Today, Victoria’s Secret is the world's largest women's undergarment seller, accounting for about half of lingerie sales in the US, a market estimated at $11.94 billion in 2013 according to research firm IBIS World. But in the shadow of this one-time disruptor and present-day Goliath, a crop of David-like start-ups are attempting to carve out their slice of the global lingerie market. “There’s a space there for more fashion sense than Victoria’s Secret,” said McGoldrick. “And lower prices.”

"I wanted to buy lingerie for my girlfriend but couldn't find anything nice enough within my budget," said Morgan Hermand-Waiche, founder and CEO of Adore Me, a New York-based start-up that is applying a fast fashion model to lingerie. While Victoria's Secret only produces two major collections per year, Adore Me drops a 30- to 40-piece collection each month. A bra and underwear set are priced at $39.95. The company has raised more than $11.5 million in venture funding from Redhills Ventures, Upfront Ventures and others. And though the company would not release exact figures, Hermand-Waiche said the company generated more than $1 million dollars in sales in 2012. "This is the first time in history that Victoria's Secret is being challenged," he said. "We're proud of that."

San Francisco-based lingerie e-tailer True & Co — which sells more than 50 brands, from Spanx to Calvin Klein, alongside its own in-house label — is focused on solving the fit problem. An astounding number of women report that they wear ill-fitting bras; a recent study of 10,000 women by Swiss brand Triumph found that 64 percent of those who participated were wearing the wrong bra size, and, of those women, only 29 percent knew they were wearing the wrong size. "The shopping experience needed to be changed. A lot of bad bras are made for women because the companies that sell them are led by [men] who don't wear the product," said Michelle Lam, True & Co's CEO, who founded the company with Aarthi Ramamurthy, now head of product. "In the evaluations we've done, 86 percent of bras don't pass the fit test."

True & Co has developed an online quiz that prompts consumers to share information about the size, styles and brands they currently wear — and the fit problems they have. Their answers help power personalised suggestions on particular products and sizes. Since 2012, when the company first launched, True & Co has amassed 7 million data points from about 500,000 women on bras, underwear and loungewear, identifying more than 6,000 breast shapes. “There is an art and science to a bra fitting, and we have tried to capture the science of it,” said Lam. “The team is applying technology in an unexpected way to solve a hard retail problem, leveraging algorithms and data that even the leading brands don’t have access to,” Josh Kopelman, a managing partner at First Round Capital, one of True & Co’s investors, said in a statement. “True & Co has identified a huge pain point in the $12 billion intimate apparel industry.”

Self-funded New York start-up Negative, launched in February 2014 by Marissa Vosper and Lauren Schwab, promises to deliver uncomplicated, high-quality intimates at affordable prices. "There's been a movement toward items that don't need ornamentation to make them cool, like the perfect pair of Rag & Bone jeans or a Mansur Gavriel bag. We wanted to make lingerie at a fair and accessible price point that doesn't compromise on quality." Vosper and Schwab said they were able to price their product affordably because of their direct retail model.

There are also new players at the high-end of the lingerie market, where Agent Provocateur and La Perla have long dominated. Curriculum Vitae, the brainchild of designer Christina Viviani, launches at Barneys New York, 10 Corso Como, Colette, Shopbop and Moda Operandi this month. "I started CV because I felt there was a void in the market," said Viviani. "I am a strong, modern working woman who loves being feminine. I see those women around me daily. We aren't sitting at home wearing pink, frilly, uncomfortable lingerie with garters, thigh-highs, and mules, eating bon-bons waiting for our men to come home."

Interestingly, Viviani is also launching with sex toys, which are still taboo in many parts of the world, and will provide “intimacy kits” to hotel properties run by both Andre Balazs and Robert De Niro. “When I would observe shoppers at sex shops, I could tell how mortified they were by so much sex in their face. It felt overwhelming and hard for people to know which products are right for them,” said Viviani. “There’s nothing sexy about a plastic box you have to cut open.  The entire industry needs to be re-branded, elevated and brought to light.”

Claire Chambers, founder and CEO of New York-based boutique lingerie chain Journelle says that since she opened her first store in 2007, the number of niche lingerie labels on the market has increased dramatically. "When I opened the first store, there was innovation going on. It got curtailed because of the recession, but now people are taking very small, specific segments of the industry and targeting them," she said, citing All Undone, a British brand offering contemporary styles for bigger cup sizes, and Lonely, a New Zealand label with a high-design aesthetic.

This fall, Chambers will launch Journelle’s in-house label with a focus on “everyday, pretty bras.” And perhaps unsurprisingly, her designer Rania Abu-Eid is a Victoria’s Secret alumna (she worked on the brand’s high-end collections). “I think Victoria’s Secret did a great job at building a brand and you cannot talk about them without recognising that,” said Chambers. “[Today] their biggest strength is scale. But if you go into Victoria’s Secret a lot of what you see is padded push-up bras or t-shirt bras. Nothing in between. I have nothing bad to say about them, but I know that when I started this company, part of it was because women told me they didn’t want to shop there anymore.”

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