Why Frederick's Of Hollywood Can't Sell Sex Like Victoria's Secret

Daniel Goodman for Business Insider Frederick's of Hollywood is going private after years of struggles.

The business is now worth about $11 million-a measly amount for what was once a dominant chain, the Wall Street Journal reports.

Frederick's used to be a viable competitor for lingerie mega-chain Victoria's Secret.

But Victoria's Secret has dominated the marketplace, posting record sales for the past several years. Meanwhile, Frederick's has struggled for more than a decade.

Frederick's was founded by the inventor of the push-up bra. At one point, pin-up icon Bettie Page modeled its intimate apparel. The company filed for bankruptcy in 2001.

Attempts to save the brand through a luxury fashion line flopped and resulted in excess inventory, according to WSJ.

Last year, Brian Sozzi at Belus Capital Advisors offered us his insight on why the brand has floundered in comparison with multi-billion dollar Victoria's Secret.

The biggest difference?

Women feel their Victoria's Secret purchases are versatile. They can wear the bras and underwear every day.

Meanwhile, Frederick's has made a business off one thing: sex.

"Frederick's is asking customers to invest in sex," during an economic downturn, Sozzi told us. "The customer perceives Victoria's Secret's core offerings as more versatile, adding all sorts of benefits to how they appear in public and not just in the bedroom."

Here are some other problems:

• Frederick's is reliant on catalogues and hasn't made its website a top priority. Victoria's Secret has done a great job of transitioning into e-commerce.
• Victoria's Secret is designed so mothers and daughters can visit together and find something they like. Frederick's is only aimed at younger women, and moms are unlikely to take their teenage daughters there, Sozzi said.
• Frederick's is avoiding promotions, while Victoria's Secret smartly uses them to draw customers in.
• Victoria's Secret captured the aspirational customer that Frederick's is only now marketing to, Sozzi said.