Getty Images/Dia Dipasupil
- Victoria’s Secret came under scrutiny in November after Ed Razek, chief marketing officer of parent company L Brands, made controversial comments about featuring transgender and plus-size models in its annual runway show.
- His comments, shared during an interview with Vogue, sparked an outcry online, and critics called for his resignation. That didn’t happen, though Razek issued a formal apology.
- Business Insider spoke to four former executives who held longtime positions at Victoria’s Secret’s corporate offices. These former employees said that Razek is untouchable in the eyes of L Brands CEO Les Wexner and has full control over the brand image.
- With these two men at the helm of the business, it would be difficult for any CEO of Victoria’s Secret’s brands to make their mark, these former executives said.
- The company’s management team has seen quite a bit of turnaround since 2016. Jan Singer recently stepped down as CEO of Victoria’s Secret Lingerie after just two years in the role. She was replaced by John Mehas.
Ed Razek was relatively unknown outside of the lingerie industry until November of last year.
But seemingly overnight, he became one of the most discussed people on the internet after he made controversial comments about transgender and plus-size models in an interview with Vogue.
In the interview, Razek, the 70-year-old chief marketing officer of Victoria’s Secret parent company L Brands, said that he didn’t think the lingerie brand’s annual fashion show should feature "transsexuals" because "the show is a fantasy."
His comments sparked an outcry online, and critics called for his resignation. Razek issued a formal apology two days later, and the fashion show aired the following month, albeit to a smaller audience than in the past.
Business Insider spoke to four former Victoria’s Secret executives who held longtime positions at the company but wished to remain anonymous in order to speak frankly about their time there. Three of these executives were based in the New York office. The fourth requested full anonymity.
These former employees said that based on their experience working there, there is no real debate as to whether Razek would have stepped down. They said that he has full control over the creative vision of the brand and is considered to be the closest confidant of Les Wexner, CEO and founder of parent company L Brands, which also owns Bath & Body Works and Pink in addition to Victoria’s Secret.
Former executives said that in their experience, Razek and Wexner had an "unshakable" view of how the company’s image should be projected and were extremely resistant to change. And, ultimately, this attitude could be responsible for the brand’s current sales slump.
A spokesperson for L Brands declined to comment to Business Insider beyond Razek’s formal apology. Requests to interview Razek and Wexner were declined.
Agostini/Invision/AP
Two men have a tight grip on Victoria’s Secret
Razek joined the company in 1983 as vice president of marketing for Limited Stores. In 1993, he became vice president, director of marketing for Limited, Inc., working directly with Wexner across all of the parent company’s retail businesses, including Victoria’s Secret. L Brands acquired the lingerie brand in 1982.
Razek has been responsible for organizing Victoria’s Secret annual fashion show since 1995 and became chief marketing officer of L Brands in the late 1990s, a spokesperson confirmed to Business Insider.
Both Wexner and Razek work in the company’s head office in Columbus, Ohio. The former executives who spoke with Business Insider interacted with the two men in regular conference calls, meetings, and during visits to the Columbus office.
"Ed … is just very untouchable in Les’ eyes," a former executive who worked at Victoria’s Secret’s New York office for nine years and was laid off in mid-2017 told Business Insider.
"He considers Ed to be like a brainchild of the brand with him," they continued. "He is the golden child and does whatever he wants."
The Wexner/Razek duo has undoubtedly been successful. Victoria’s Secret dominated the US lingerie market for years, and Razek was considered one of the most influential people in modeling throughout the early 2000s, helping to launch the careers of household names such as Gisele Bündchen, Tyra Banks, and Heidi Klum.
The former executives who spoke with Business Insider said that working at Victoria’s Secret was considered to be the job in lingerie, and there was always a feeling that they were very lucky to be there.
But as the industry evolved, critics say that Victoria’s Secret did not, and according to these former executives, who cited experiences they had while working there, it’s because these two men were resistant to changing things.
Victoria’s Secret
"They have this antiquated idea of what sexy is," the former executive who worked at Victoria’s Secret New York office for nine years said. "It’s changing, we are all changing and without making the right adjustments to the product and the voice you put out there, I don’t know what their future is."
These two men have a specific view of what makes a woman sexy, another former employee who worked in a senior management role at Victoria’s Secret for over a decade and was also made redundant, told Business Insider.
"[They] have an unshakable point of view as to how that brand should be projected," this former executive said. "They don’t want it to change."
This has also made it difficult for other company leaders to make their mark, these former executives said, which could be why there has been frequent turnover within the company’s management team.
When Sharen Turney, the longtime CEO of Victoria’s Secret, left abruptly in 2016, the business was split into three — Victoria’s Secret Lingerie, Victoria’s Secret Beauty, and Pink — and each division had its own CEO. The most recent CEO of Victoria’s Secret Lingerie, Jan Singer, stepped down after two years in the role in November and was replaced by John Mehas, former president of Tory Burch.
Pink CEO Denise Landman retired at the end of last year and has been replaced by Amy Hauk, former head of merchandising and product development at Bath & Body Works.
"There was an understanding that Les Wexner was the founder and it is his company; he is the biggest shareholder," another former longtime executive told Business Insider. "I think that is why there is new leadership every three years because people are hopeful that they have more of a say than they do."
Other company leaders were often blamed for sales problems when a lot of it was due to the vision of the brand not being current, this former executive said, adding: "The vision of perfection is owned by Ed and Les."
A spokesperson for L Brands declined to comment on this.
L Brands’ shareholders step in
Earlier this month, the CEO of Barington Capital Group, which is a shareholder in L Brands, wrote a fiery letter to Wexner urging him to, among other things, update the brand’s image and switch up its predominantly male board of directors.
Barington CEO James A. Mitarotonda called out the lack of diversity on L Brands’ board and said that since the majority of the board also has ties to the Wexner family, they could not be seen as truly "independent" voices.
"The existence of these social and business relationships raises serious questions as to the true independence of these directors," the letter said.
It continued: "Given that you are the Chairman of the Board and your wife and your personal business advisor also serve as directors, it is unclear that the Board as currently comprised has the independence to effectively oversee you as Chief Executive Officer."
Barington recommended that Wexner not only switch up the board, but also step down from his dual role of both chairman and CEO to take on just one of those positions.
Razek was also called out in the shareholder letter.
"In our view, Mr. Razek has done a poor job of stewarding Victoria’s Secret’s brand by failing to communicate a compelling, up-to-date image that resonates with today’s consumers," Mitarotonda wrote.
He added: "While we recognize that Victoria’s Secret cannot be all things to all people, we believe that the Company should be delivering a more inclusive marketing message that promotes a more expansive view of beauty."
Mitarotonda referenced the success of American Eagle’s Aerie brand, which recently reported its 17th consecutive quarter of positive same-store sales growth. Starting in 2014, the brand has swapped out airbrushed ads for unretouched photos and launched a body-positive campaign known as #AerieReal.
Barington Capital Group declined to comment further on the letter to Business Insider.
L Brands issued a statement soon after the letter was published, saying that it has taken steps to address current growth issues by closing Henri Bendel, selling its La Senza business, and appointing new CEOs for its Victoria’s Secret Lingerie and Pink businesses. It did not comment specifically on Razek, however, and declined to comment further on the letter.
A spokesperson for L Brands referred Business Insider to comments made by group CFO Stuart Burgdoerfer in its recent earnings call, when it reported that same-store sales had declined by 3% at Victoria’s Secret for the fourth quarter of 2018 and by 2% for the year overall. Burgdoerfer acknowledged the company’s weak results and said that "everything is on the table." He added that the company would be focusing on the customer and merchandise in the coming months.
Dimitrios Kambouris/Getty Images
‘Any person who makes a statement like that does not have a place in 2019’
Two days after Razek’s interview with Vogue was released and quickly went viral, he issued a formal apology online:
My remark regarding the inclusion of transgender models in the Victoria’s Secret Fashion Show came across as insensitive. I apologize. To be clear, we absolutely would cast a transgender model for the show. We’ve had transgender models come to castings… And like many others, they didn’t make it…But it was never about gender. I admire and respect their journey to embrace who they really are.
Jeremy Robinson-Leon, a crisis management expert at Group Gordon, told Business Insider that there is precedent for leaders stepping down after making similarly controversial remarks.
He used John Galliano’s comments at Dior as an example. Galliano was suspended in 2011 after he was accused of insulting three people based on their race. A video surfaced showing Galliano saying "I love Hitler" and telling two women their parents "would have been gassed."
Robinson-Leon said that a company’s decision to ask an executive or someone who is a voice of the brand to step down in these situations often depends on how seriously it is treating the issue.
"If you thought this was an important part of your market you’d have handled this differently," he said. "The fact that [Razek] is still at the company signals that Victoria’s Secret is not so concerned with the critics who advocate for more inclusivity. That’s the bottom line."
This adds weight to the recent criticism that Victoria’s Secret is behind the times, according to Robinson-Leon.
"Any person who makes a statement like that does not have a place in 2019," he said.
But there’s no cut-and-dry solution here. The late Karl Lagerfeld, for example, was known for making controversial remarks and keeping his job.
In an interview in April 2018, Lagerfeld spoke out in defense of a stylist who was accused of pulling down models’ underwear without consent. "If you don’t want your pants pulled about, don’t become a model!" he reportedly said. "Join a nunnery."
Lululemon founder Chip Wilson famously made remarks about the brand’s leggings not being suitable for larger women after customers complained that the material was pilling in 2013. A month after this interview, Wilson resigned as chairman but stayed on as a member of the board of directors. He left the company altogether two years after that.
Former Abercrombie CEO Mike Jeffries is another example of this. In 2013, a 2006 interview in which Jeffries said that the brand goes after "attractive" and "cool" kids resurfaced and caused controversy.
"A lot of people don’t belong [in our clothes], and they can’t belong," he said.
Jefferies was stripped of his role as chairman of Abercrombie’s board of directors in January 2014. He stepped down as CEO at the end of that year.
The fact that Razek didn’t leave "speaks to the core of the company," Gabriella Santaniello, analyst and founder of retail research firm A Line Partners, told Business Insider. A Line Partners provides in-depth information on brands to investors. Santaniello has worked in the retail consultancy field for over 10 years.
"It just reaffirms what everyone has been thinking: they are out of touch," she said."It has shown up in their sales for years."
Same-store sales at Victoria’s Secret have dropped for the past three years, and last month, the brand announced it would be closing as many as 53 stores this year, citing a "decline in performance." It projected that its square footage in North America would decline by about 3%.
Santaniello said that the company’s woes stem from having Wexner at the helm.
"He needs to retire," she said.
Wexner is often considered one of the most successful businessmen in the US. He is worth more than $6.3 billion and has worked his way up from running a small store in downtown Columbus to owning and founding L Brands, one of the largest retail corporations in the US.
However, he’s also the longest standing CEO of any Fortune 500 company.
In a rare interview with the Financial Times last year, Wexner said that the typical lifespan of a fashion business is 15 years. He’s been at the helm of L Brands for 56 years.
He told the FT that the key to Victoria’s Secret’s survival is reinventing itself as its shoppers evolve. "When the customer zigs, you zig," he said.
But, some of Victoria’s Secret’s critics say this is exactly what the brand has failed to do.
"The sad part about the brand is that they have this beautiful heritage, they created the angels, they made the whole supermodel explosion and there is a rich history, but they don’t know how to evolve the brand to what is happening to us as a culture," the former executive who worked at Victoria’s Secret for nine years said.
"I think that will be the death of them in the end," he said.
If you are an employee of Victoria’s Secret and have a story to share, contact this reporter at mhanbury@businessinsider.com or securely via encrypted messaging app Signal at +1 (646) 768-4716 using a non-work phone.
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Source: Business Insider – feedback@businessinsider.com (Mary Hanbury)