Wexner’s invention model is classic: he creates for himself a clear representation of market structure, product economics, and competitive weaknesses. His original invention was The Limited, which ripped women’s sportswear as a category out of the sleepy department stores, where it hadn’t been well-defined. He put it front and center in a small-footprint store. It guided women to fashion, comfort, and security. On a concept board, it would have fallen on deaf ears. On a busy street or in a mall, it became a “must shop.” Wexner did it again with Express, aimed at younger women. Then he did it again with Limited Too for girls. He bought Abercrombie & Fitch when it was near bankruptcy and transformed it into a destination for clean-cut, preppy clothing at premium prices.
And then he found a way to take “sexy” mainstream with Victoria’s Secret. He knew that women have “every side of sexy” in their heads, and he delivered “playful, impulsive, fresh, optimistic, sparkling” under one roof. He took lingerie and laddered up into fragrance and body care with higher margins, higher velocity per square foot, and immediate international appeal.
In Wexner’s view, consumers react. They know what they love. But they can’t explain why. They know what they hate. But they can’t explain why. And they shift on a dime. For Wexner, success in business is about anticipation, instinct, insights—and, ultimately, curiosity and experience. He will, however, listen to tight summaries of in-depth consumer profiles and is always curious to understand what we call the “wheel of consumer emotions.” Consumers don’t neatly fit into any one segment. Their behavior and the way they purchase vary as a function of context. Where are they going? What are they doing? Whom are they doing it with? What conversations have they had? What media have they most recently seen or heard? What will drive their behavior at the moment when they are finalizing a purchase?
Wexner is insatiably curious. His curiosity and his experience have allowed him to give customers what they really, really want. He talks about “seeing around the corner” in anticipation of changes in shopping behavior and trends.
“Creators know how difficult it is to create a brand. They understand how fragile their brand’s equity is,” he says. “We know that the force of gravity is likely to bring you down. We know that success breeds competition. And the most loyal consumer is loyal for about 32 seconds. You can’t and shouldn’t count on them for their loyalty. You need to win them back with reinvention. Everything changes. So if you don’t exercise the change muscle, then you just lose the ability to change. You either go out of business or you evolve into a different position.”
Wexner believes in the power of big brands to capture consumers’ imagination and to influence the way they spend their money. He knows from experience that leadership requires continuous evolution, continuous investment. What’s hot today is cold tomorrow. He has studied and lived the history of consumer shopping and consumption. He knows that where there is success, imitators follow. He believes that where there are retailers earning price premiums, there are discounters coming. He says that to earn above-average returns, you need to bring innovation, news, and depth to a category.
Wexner operates nearly 3,000 stores in the U.S., Canada, and the UK and has 1,000 franchised stores in other markets. More than half his company’s profits are made in November, December, and January. Foreign stores are among the highest grossing in the company. Typically, they have a very small footprint but extraordinary
velocity. The Victoria’s Secret store on London’s Bond Street has sales of $80 million per year. Dubai’s is the third-largest store in the world. A small store in Chengdu, China, has sales of $14 million per year. His international expansion has been patient and careful. He generally finds a trusted local company and partners with it, tightly controlling the brand, merchandising, and operational training.
Wexner made sexy lingerie mainstream without offending anyone. He gave consumers what they really want. They want a sexy self-image and confidence.