2015 Victoria’s Secret Fashion Show

Victoria’s Secret Fashion Show always does it right…Great Brand…Great Marketing…Great Image…and yes sex sells. 

Tonight (actually Monday the 8th of Dec), 47 models in 75 barely-there outfits will pace the runway in an hour-long television extravaganza aired on CBS CBS -2.77%. The Victoria’s Secret Fashion Show has become the most-watched fashion event on the planet and with it, a big business.

“The Victoria’s Secret Fashion Show is very important,” says Victoria’s Secret President and CEO Sharen Turney. “It is the opportunity to bring [together] all these beautiful girls, great musical acts and all the products and lingerie.”

The show, which features leggy supermodels posing in underwear largely available for sale in your local mall, is the most extravagant marketing trick in the lingerie line’s arsenal. Filmed last month at New York’s Lexington Avenue Armory, it is edited into an hour-long special that creates publicity like no other.

Behind The Wings: Inside The 2015 Victoria’s Secret Fashion Show

 

“When you want to charge up for a product you have to sell more than just cotton underwear,” says Bridget Weishaar, a Senior Apparel Analyst at Morningstar MORN -1.23% who covers Victoria’s Secret and its publicly-traded parent company, L Brands LB -1.03%. “What you’ve got to sell is that this will give you access to a different lifestyle–it makes a basic product very sexy and fun.”

By featuring young, popular models with huge social media followings, such as Gigi Hadid and Kendall Jenner, plus buzzy pop acts like The Weeknd and Selena Gomez, Victoria’s Secret ensures they appeal to an ever-fickle young audience.

“It’s about newness so every year this is updated with the latest music and trends,” notes Oliver Chen, Managing Director and Senior Equity Research Analyst covering retail at Cowen and Company. “This is a way to keep up with millennials.”

 

Still, that appeal comes at a price. A 2011 estimate pegged the fashion show’s cost at some $12 million; a far cry from the $200,000 to $1 million pricetag of typical fashion shows .

“We don’t disclose [how much we spend],” says Turney. “It’s not as much as you would think and it actually pays for itself five times over.”

Part of its recuperation comes from licensing the show to CBS for an estimated $1 million-plus. Over 9.1 million viewers tuned in to the show last year, according to Nielsen, down from 9.7 million in 2013 . Reports peg 30-second ad prices during the event at some $200,000.

Victoria’s Secret also earns back from corporate sponsorship–six different brands including Swarovski and Fujifilm sponsored this year’s show. For the honor of having your curling iron or chocolate backstage with the models–and accompanying media circus–companies are willing to pay upwards of $25,000.

Victoria’s Secret does not sell tickets to the live event–the 2,000-odd passes are handed out to select celebrities, journalists and corporate guests in an attempt to bolster its scarcity value. (For a report from the show itself, read Behind The Wings: Inside The 2015 Victoria’s Secret Fashion Show.)

Perhaps the most important remuneration comes after the TV has been switched off. ”It’s all about getting people in stores,” says Chen. “[The show] helps create demand.”

The Victoria’s Secret Fashion Show: A $50 Million Catwalk

It’s difficult to measure how that demand translates at the cash register. One-third of Victoria’s Secret’s highly-seasonal sales occur in the fourth quarter, which is also typically its most profitable quarter.

“The show overlaps with holiday sales so I don’t think there’s any way to read into its [sales impact],” notes Weishaar, who says the retail business’ seasonal nature makes it difficult to judge the show’s efficacy.

Victoria’s Secret revenue for the fiscal year ended January 31st 2015 was $7.2 billion; it tallied a $1.2 billion profit. Despite notching fewer viewers for the show’s recent years, sales are up: Estimates peg this year’s revenue at $7.6 billion , which is double the average 3% sales growth seen by apparel brands such as The Gap.

The Angel Life: How To Make It As A Victoria’s Secret Model

Analysts say Victoria’s Secret is stealing market share with steady same store sales growth even as mall traffic decreases. (In 2014, each U.S. Victoria’s Secret store sold an average $5.06 million worth of goods, up 2% from $4.96 million in 2013.) Most importantly, the show, which airs in 185 countries, primes ground for global growth by building brand awareness in countries that don’t even have stores.

At home on Wall Street, bejeweled bras pay dividends: Share prices in Victoria’s Secret owner L Brands are up 4.97% to $99.49 in the last month.

 

 

See attached video content on the Forbes article homepage…click here. 

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