Wexner and the Lessons of The Limited

Here is a critical bit of info from a titan who says he learned it as a kid.  Yes, that handing down of information has been broken by FIRE.  Here is Leslie Wexner:

“When I was a kid, before my first store, they talked about stores as theater and retail as theater. It still is,” says the 77-year-old, attired casually in gray slacks and a blue oxford. “Retailing is a free form of entertainment.”

FIRE is the massive, false economy which will continue to degrade, as our "enemies" improve, slowly surely. The guy not only received an education from an earlier generation, he never bought into the dot.com  madness. Here...

In defiance of e-commerce evangelists, he opened 50 new locations in the last year.

Yes, brick and mortar is where the customers are, plus good old fashioned mail order. Catalogs drive sales to internet where orders are placed...

His online business is not the focus, but it’s doing just fine, accounting for $1.5 billion of his annual sales.

The selling is out of the catalog, the transaction is on the web. And he hasn't started exporting yet...

And there are billions more waiting for Wexner outside of America’s borders. 

What he has done is franchised it out to other countries, that is having no presence of his own companies overseas, just let locals import and manage the brand in their respective countries.

Wexner found a problem and worked on a solution...

When his father left on vacation, Wexner tried to solve the riddle of why his dad had always worked so hard but never made any money. He found a stack of invoices, and on a piece of scrap paper began tallying the cost and profit from each item in the store.
The numbers added up to a counter-intuitive conclusion. Although big-ticket items like dresses and coats looked like they had huge margins, they actually made no money because they sat on racks forever. All of the store’s profit came from less glamorous items like shirts and pants. 

His dad fired him...

... founding a rival store to his father’s with a $5,000 loan from his aunt in 1963. He put a limited selection of clothing in the store–only the shirts and pants that flew off shelves–and named the place The Limited. ...He made $20,000 of profit in his first year, twice as much as his dad’s best. The secret was his focus on only a few products, a revolutionary idea at the time. 

Steve jobs studied him...

Wexner says that Steve Jobs (or presumably it was Jobs–”what’s-his-name from Apple,” Wexner says off-handedly) was one of many to credit The Limited boss with inventing specialty retail. “Probably did,” he shrugs.

I recall the era well.  There were countless people opening "boutiques."  Most of them were crammed with merchandise and went under.  Wexner did it right. He tried to figure out how Victoria's Secret worked when it was a one man operation in San Francisco. The founder sold out to Wexner,

His financial advisors had warned him that $1 million was too much for the business. Wexner let Raymond run it under The Limited’s umbrella for a while, and his deputies rolled their eyes as it bled millions more. When they examined the financials more closely, they realized the only way Raymond had been making any money before the acquisition was from a secondary business selling mail-order sex toys. Wexner fired Raymond and moved headquarters to Columbus. 

Wexner took the same idea and made it profitable.  Raymond could not, so he had ventured into something desperate and kept it secret.  Raymond failed at his next venture, and then killed himself.  Why do two people working on the same project diverge so terribly: billionaire v suicide.  Perhaps it gets to how they process suffering...

By the common definition of wealth, Wexner was unhappy...

“By the time I’m in my early 30s, I’m, by most measures, enormously successful. And the more successful I was in terms of business achievement and accumulation of income, the more ineffective, unhappy I was.”

Read the article for how Wexner dealt with it...  And comes the question...

After 51 years as CEO of his company, is Wexner thinking about retirement? He smiles, having known the question was coming. 

Of course not.

Update:  Victoria's Secret puts out 400 million catalogs a year...  if that generates $1.5 billion in online sales, then that is $3.75 per catalog.  Not worth it, unless the catalog drives people into the stores plus online.  Wexner owns both sides, the website and the brick and mortar, and links both through dead tree advertising.  You should too...

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post