It's just days away from the Super Bowl of the scantily clad -- the 2013 Victoria's Secret Fashion Show. It's the annual parade of teen and 20-something supermodels with truly "one percenter" bodies sashaying down the catwalk in the most exaggerated forms of the latest offerings from Victoria's Secret, owned by L Brands (NYSE: LB ) . This year the show airs on CBS (NYSE: CBS ) on Dec. 10.
The bling behind Victoria's show
The Victoria's Secret Fashion Show reflects the growth of L Brands from a company worth $1.9 billion when it debuted on the NYSE in 1995 to its current $18.8 billion market cap. No other retailer has such a grip on public advertising, not even Super Bowl advertisers. As the biggest and most successful infomercial ever, here are five things you probably don't know about the Victoria's Secret Fashion Show.
1. The show started with a paltry budget: Oscar Wilde could have been describing a lingerie spectacular when he said that nothing succeeds like excess. From its humble beginnings 18 years ago with a $120,000 budget to last year's $12 million phenomenon, each year the show kicks it up a notch. The feathers, the Swarovski crystals, the $10 million Fantasy bra, the highest paid supermodels, the celebrity performances all add up. This year pop star Taylor Swift headlines. Fall Out Boy and Neon Jungle are also featured, as well as 69 outfits modeled by 36 models.
2. The show really rakes it in: As much as the show costs, it generates even more in advertising revenues. And, of course, the entire show promotes the Victoria's Secret fantasy. Commercial time plus CBS' broadcasting rights brought in ~$16 million last year. Victoria's Secret executive VP for brand communications, Monica Mitro, told The Hollywood Reporter, "It's the only one-hour network show dedicated to a single brand. It puts our brand in front of millions of people around the world during the crucial holiday period." Note: CBS itself promotes the show with its website and commercials in advance of airing, etc.
3. That multimillion fantasy bra has never sold: The queen of the show, the MVP, is the Victoria's Secret Angel who gets to parade around the stage wearing the, er, crown -- the Victoria's Secret Fantasy Bra. This year Candice Swanepoel will wear the $10 million 18-karat gold bra that features more than 4,000 rubies, sapphires, and diamonds with a total carat weight of 1,564.62 carats. Interestingly, no one has ever purchased a Fantasy Bra. After the show the bras are eventually dismantled. FYI: this year's bejeweled bra isn't even the most expensive Fantasy Bra ever made -- the $15 million bra worn by Gisele Bundchen in 2000 takes that honor. I
4. Despite all the complaints, the show always goes on...except for one year: Annually, the FCC receives thousands of complaints about this show. Organizations as varied as the National Organization of Women, Native American groups, and the American Decency Association have protested the show. But the show always goes on, save for one year: in 2004 a nervous CBS shelved the show, still reeling after a Janet Jackson "wardrobe malfunction" during the Super Bowl.
5. Seats are available: Although many of the front row seats are comped to recognizable sports and film A-Listers, tickets are available through charity auctions and prime ticket brokers for a minimum of $12,500 -- but more likely you would end up paying around $14,000. L Brands doesn't need the ticket revenue; the high cover charge is likely designed to keep out the riff-raff. Note: a ticket also allows you access to the after-party.
Or you can be one of the 12.4 million at-home viewers the show has lured in the past. In 1999 the company debuted an Internet webcast of the show, which led to a server crashing under the weight of 2 million-plus viewers, despite poor production values.
Although the fashion show doesn't bring in the same viewer numbers as the Grammys or the Oscars, any Hollywood producer would probably run over their mother to get Victoria's Secret show numbers.
The fundamentals of fantasy
Victoria's Secret has never flatly delineated how much the show helps sell the brand. Looking at the growth in market cap and the the growth in the cost of the show, they both amount to roughly tenfold increases on a back of the envelope computation.
On Nov. 21 the company reported third quarter earnings and only mentioned the show in passing. They did mention a 19% year-over-year rise in EPS for the quarter and an increase in total sales by 6% to $2.171 billion.
Analysts who attended the live fashion show in November (CBS runs the tape) were, not surprisingly, bowled over. Businesswise, the upshot of a Cowan & Company analyst note was expectations of 12 million American viewers or more from roughly 180 countries. The analyst also predicted L Brands to grow Victoria's Secret rapidly outside the U.S. to a total of 1,000 stores globally.
Who knows, maybe the Fantasy Bra will find an overseas buyer as it expands in the coming year.
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