image: adbagency image: adbagency

The lingerie/undergarments industry, which was, until very recently, dominated largely by the dated model set forth by Victoria’s Secret and its founder, Roy Raymond, in the 1970’s, is in the midst of a massive revamp. The traditional retail model, and the tenets underlying the making and marketing of lingerie are changing in light of an influx of new market participants aiming to innovate from the top down. Not surprisingly, the industry’s giants are swiftly falling from grace and new go-to brands are emerging.

Consider Private equity firm 3i, which made headlines recently, after reportedly hiring London-based investment bank Rothschild & Co. to sell off its troubled upmarket lingerie brand, Agent Provocateur – the label it purchased in 2007.

In the years following its launch in 1994 by Joseph Corre, son of British fashion designer Vivienne Westwood, Agent Provocateur “has never struggled to attract column inches. It has positioned itself perfectly at the place where the demimonde intersects with the high street, and ‘sexy’ propositions ‘kinky’ for a saucy two-step,” as noted by UK-based publication Campaign. The brand got the royal treatment from celebrities ranging from Rihanna, who filmed a promo for the brand in 2010, and Beyoncé, who wore an Agent Provocateur bra in her widely-watched ‘Lemonade” visual album and more recently, in her Instagram pregnancy announcement – to the wildly influential Kardashian/Jenner sisters and an array of the fashion industry’s most famous models.

The company raised its profile further by enlisting the help of actress Penelope Cruz, who teamed up with Agent Provocateur in 2012 to create the lingerie company’s first-ever diffusion line, L’Agent. It has since expanded its collaborative reach with an “it” accessories label, Charlotte Olympia. Agent Provocateur also collaborated with ShowStudio mastermind Nick Knight for a “groundbreaking exploration in extending a narrative advertising campaign to also create an experimental film series.” It also kept abreast of advances in social media, launching WhatsApp campaigns, and taking to Snapchat, Periscope and Tumblr for its cheeky #KnickersForever initiative.

Further, if magazine covers (and rap lyrics, a popular alternative metric to gauge a brand’s level of visibility) are any indication, Agent Provocateur was both positioned and received favorably.  This assertion is boasted, as well, by the array of copies of the brand’s most desired items. You may recall that Agent Provocateur sued ‘Made in Chelsea’ star Kimberley Garner in 2013 for allegedly copying its protected Mazzy bikini design. ASOS, Victoria’s Secret, Target, H&M, and Frederick’s of Hollywood have also come under fire for their Agent Provocateur knockoffs.

Yet, despite all of this, in recent years, the pricey lingerie brand, which has traditionally competed against well-known – albeit less expensive – brands, such as Victoria’s Secret, as well as similarly situated rivals like La Perla, has fallen out of favor.

With so many companies – from mall brands to luxury conglomerate-owned fashion mainstays – struggling for various reasons, we ask: What went wrong for Agent Provocateur, exactly? Well, trouble has certainly been brewing for the lingerie brand. Last November, 3i wrote down the value of its 80 per cent stake by £39m — the private equity firm’s largest devaluation in the first half of last year, even though Agent Provocateur only represents one percent of its entire portfolio.

In connection therewith, the private equity group said: “We are supporting the new management team to put in place a new strategic plan, which involves a restructuring of the business. Agent Provocateur is still a valuable brand and, as part of this restructuring, we have provided further investment of £4m in the quarter to 30 September 2016.”

An Industry-Wide Issue

Agent Provocateur is not the only one struggling. Frederick’s of Hollywood, the retailer of moderate priced women’s lingerie, which until relatively recently consisted of stores rooted in shopping malls across the U.S., began closing its brick-and-mortar stores in 2015 in an attempt to cope with plunging sales. The Los Angeles-based brand, which was the market leader in lingerie until the 1980s (when it was overtaken by Victoria’s Secret), filed for Chapter 11 bankruptcy in 2015 (after filing for the first time in 2001) and has since opted for an entirely online retail network.

 image: Negative Underwear  image: Negative Underwear

Victoria’s Secret, which got its start in 1977 and has since grew to nab the title of the largest American retailer of women’s lingerie, announced in March 2016 that it would restructure its business to focus on core categories, thereby dropping swimwear and certain other merchandise categories from its offerings. The move was aimed at narrowing the company’s focus and simplifying the operating model, according to Chief Executive Leslie Wexner.

The slip in sales among more traditional lingerie brands is the result of an array of factors, one of which is the marked surge in demand for more casual lingerie, including as bralettes, among millennial shoppers, in particular. Analysts also point to an increase in the number of newish luxury brands encroaching on the territory of more the traditionally-formatted lingerie brand.

Consider the rise of Kiki de Montparnasse, Jean Yu, and Fleur du Mal, for instance, which have entered the market since Agent Provocateur’s founding, offering appealing luxury wares oftentimes for less than the Le Perla’s and Agent Provocateur’s of the world.

Also, it is important to not overlook the outpouring in seed funding for undergarments brands over the past two years – New York City startup Lively, for example, raised $4 million in funding in 2016 to grow its direct-to-consumer lingerie brand – and the fact that these brands are heavily shaping the way consumers shop for intimates. In much the same way as Victoria’s Secret altered the way women (and men) shopped for lingerie beginning in 1977 – bringing lingerie out of the department store and into its own space and into its own popular mail order catalogs – many of these newly founded brands are evolving further, and aiming to make lingerie shopping easier and more affordable for consumers.

Newcomers Capture the Market

“Lingerie is a daily necessity yet a constant source of frustration for most women,” says Jiabei Chen, the Harvard Law School graduate, who co-founded lingerie start-up Ampere. According to Chen, she and her colleagues “were disappointed by both the product and the experience of shopping for lingerie. We could never find anything we loved in our sizes and hated being fitted by complete strangers in public spaces.”

Another important differentiator amongst the new guard: Sizing. As for why Adore Me founder and CEO Morgan Hermand-Waiche decided to launch his collection in 2011, he says: “There are not enough alternatives for women in America to buy their intimates.” Adore Me, a subscription based lingerie service that boasts a selection of “Designer Lingerie For Every Body,” has gained widespread praise for its inclusiveness.

The brand stocks bras that range in size from 30A to 44G; this is in stark contrast to Victoria’s Secret, which stops at size 40DDD. “We really cover the full spectrum of sizes … [and] we’re also inclusive through our price,” Hermand-Waiche says of his brand. “We finally made high-quality lingerie affordable for everyone.” Adore Me has also added speed to the mix. Traditional lingerie brands tend to follow the two-collections (or so) per year approach; Adore Me introduces 30 to 40 piece collections once a month. And do not forget more accessible pricing.

Negative Underwear, a New York-based label founded in 2014, cut out the middle man in order to offer consumers more affordable, yet still high quality, undergarments. Also embedded in Negative’s brand, the desire to move away from traditionally “sexy” elements of lingerie, such as lace and frills, that are meant to primarily appeal to men. The brand is, instead, interested in making pieces that women deem to be sexy.  This represents an important shift in perspective being introduced by these new market participants.

Noe Garments, a label that splits time between studios in Laguna Beach, California, and Hanalei, Kauai, offers sustainably-made and sourced wares that marry “function and fashion.” Designed and manufactured entirely in the U.S., Noe eschews trends in favor of putting forth garments that stand the test of fashion’s cycle of seasonality.

 image: Lively image: Lively

Still yet, consider Lively. Launched just last year by CEO Michelle Cordeiro Grant, a digital veteran coming from Victoria’s Secret, Lively represents the new, priding itself on making lingerie “in a broad size range, at an accessible price (all bras are $35), and with an ethos that aims to support and inspire women.” For Cordeiro Grant, the latter was an element that was missing from the lingerie market, given that it was – until only recently – dominated by men. “Women were participating in these brands but not necessary leading the way,” she says.

Something of a total package, Lively not only aims to “bridge high style and ultimate comfort, only taking the most functional pieces to create a new perspective,” but “acknowledges that women don’t have time to go through 600 styles.” Convenience is key, but so is the furtherance of a larger message catered specifically to women to go with the products. “We wanted to create a product for women made by women because women were so hungry, passionate, ready for a new conversation,” says Cordeiro Grant.

What exactly does that look like? Well, according to Cordeiro Grant, women, as consumers, “were unhappy” with the male-dominated messages being put forth by many of the lingerie giants. And so, Lovely stepped in to enable its customers to be inspired “to live a purposeful, fulfilling life” on her own terms and not in accordance with the previously uniform marketing of undergarments.

Still yet, there has been a rise in online lingerie department stores of sorts, such as Journelle, which puts the ever-increasing number of undergarments brands under one e-roof. Claire Chambers, the founder and CEO of Journelle, which also maintains three brick-and-mortar stores in New York and one in Chicago, told BoF that since she opened her first store in 2007, the number of niche lingerie labels on the market has “increased dramatically.” She stated: “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.”

Out with the Old

The influx of emerging-stage brands – which are doing it right, so to speak, on all fronts – is proving problematic for the market’s more old school brands, which are being outpaced by these younger, more innovative competitors.

With the advances being made within this sphere and this level of attention in mind – in terms of price, sizing, ease, and specialty – more traditional brands, whether they be Victoria’s Secret or Agent Provocateur, cannot afford to rest on their laurels, and 3i is seemingly learning this the hard way.