Rangsit University International College

International Marketing
ILA 112 – Dr Bruce

Case study

Gyem LHAM
6305768
2022

International Business
Abstract
This research is conducted under ILA 112 – Business Law by Dr. Bruce. It depicts some of the
dark secrets inside “Victoria’s secret” – fashion industry and how it became to be considered
normal in the industry. Eventually such disgusting truths came to light when a lawsuit was filed
against the company for misogyny, sexual harassment, and bullying. Such misbehaviors should
never be considered normal nor tolerated in any kind of workplace. Sexual harassment is mostly
prevalent in the fashion industry against women. It is necessary to address such misbehaviors
properly and legally to make women be confident and proud of their choice of career in life.

Introduction
The fashion industry is a product which follows modern age. In the 19 th century, all clothing was
handmade for individuals by dressmakers and tailors. By the 20 th century, technologies increased
the mass production of clothing. With technological invention and growing fashion standards –
the fashion industry started growing internationally. A common showcase of the designs of the
fashion designers are through runway shows. The models serve as a visual aid for people who
are creating works of art. Therefore, each of them should have a fine petite body. “They are the
epitome of glamor” (Steele & Major, 2022).

Behind all these glamor, the fashion industry holds a dark secret. Many young and naïve models
are exploited in this industry. Most of the women in the fashion industry faces high rates of
sexual harassment and violence around the world. According to global justice organization’s
survey – every 8 in 10 women said they were harassed or witnessed sexual harassment and
molestation in the workplace Many types of harassment occur in different workplaces, and it is
even more dominant in the modeling industry. However, these women are reluctant to report
their abuse due to their nature of the business. Moreover, “many of the models have
psychological issues which makes them more vulnerable to control, mistreatment, abuse, and
assault during their course of employment” (Fleming, 2017).

One must start their modelling career from a young age – teenage. They are exposed to a world
where they believe they are supposed to do every instruction given by the elder in the room.
These young models cannot break free of such assault and harassment because they are dealing
with some powerful individuals which could end their career before it even started. The models
had no voices of their own and are supposed to do whatever their agency wants them. They are
not even warned of the photographers’ notorious behaviors.

Victoria’s secret
Victoria’s Secret is an American lingerie, clothing, and beauty retailer. The brand has built its
path in the fashion industry and is one of the visible brands in the market. It is the largest retailer
of lingerie. Victoria’s secret popularized their annual fashion show with supermodels which were
allegedly called Angels. The brand was admired and desired by many around the world in the
late 1990s and early 2000s.

It was founded in 1977 by Roy and Gaye Raymond but was sold to Leslie Wexner in 1982. The
brand expanded quickly after Wexner took over, growing in the number of stores in shopping
malls. By early 1990s, Victoria’s Secret became the largest lingerie retailer in the United States.
(Hanbury, 2022), stated that Victoria’s Secret gained a lot of popularity through its annual
extravagant and distinct runway from other brands. The runway was an essential part of the
brand’s image which was promoted using the fantasized angels. With the introduction of
cosmetics and fragrance line, it gained more popularity and started expanding internationally.
The brand defined femininity for all the women. These Angels walks for the brand on runways
and have signed contracts. They are obligated to promote the brand, appear on talk shows, and in
every major runway show. But only few of the models are selected to be angels and become
well-known. The business of beauty can be very ugly, especially in the cutthroat world of
modelling. It's an industry that wants to portray itself as the epitome of health and happiness. The
reality though is anything but anorexia, drug use and bullying are as routine as smiling for the
cameras.

The Victoria’s Secret Angels have been synonyms with the lingerie brand for decades. The brand
however, failed over time in terms of inclusivity. The models they partnered with, which they
called the angels, used to be very similar to one another. The brand employed only white, petite,
elite and pretty women to publicize their lingerie and become a voice of the brand. However, the
brand started to loosen its popularity due their concept about Angels and missing out on fashion
trend from 2015 to 2018.

The brand had to go through rebranding and considered the fast-forwarded culture after getting
sued for sexual harassment, bullying, and misogyny. Hanbury (2021 & 2022), he says that the
company deemed that the Angels were no longer culturally relevant and ended its Angels brand
on 2021 and launching VS Collective. Now, the brand is refocusing its brand image by being
more inclusive.

The Brands culture on Harassment

According to Lampen (2020), Victoria’s Secret was exposed to have created a workplace of
sexism, harassment, bullying, and misogyny for an extensive period. According to New York
Times reports, CEO Lex Wexner allegedly supported Razek throughout his stay in the company
despite having massif complaints on sexual harassment.

Why had it thrived?

Leslie Wexner – chief executive at L Brands (parent company of Victoria’s secret), along with
his ally Ed Razek – former chief marketing officer, allegedly created the culture of sexual
harassment in the company and let it thrive. They made models feel uncomfortable and pressured
in their working environment. The models couldn’t reject or raise their voices against them due
to their high status and the fear of harming their careers reported by (Lampen, 2020).

According to a source from YouTube (60minutesAustralia, 2021), these models were recruited at
their young age, making it easier for them to manipulate. Some models who voiced out stated
that they were reprimanded if they eat more and gain an inch of fat in their body. The models
were introduced to drug at an early age on the set to acquire and maintain the desired tiny bodies
without the models’ intention and knowledge. Victoria’s Secret models believed “thinner the
better”. Above all, they made the models believe that the environment they live in is normal. To
acquire the desired body type, these models would go days without eating thus leading to eating
disorder in the long run for some of them.

Moreover, all “the models who complained about the sexual harassment were silenced by giving
money and a non-disclosure agreement” (Lampen, 2020). One of the former Victoria’s Secret
Angels, Bridget Malcolm claimed that she heard Wexner, and his assistant laugh by saying “if I
get a dollar for the amount of sexual harassment case that came across my desk, I’d be rich”. The
models had to undergo body shaming, sexual harassment, misogyny, and extreme methods to
lose weight and look skinnier as well.

The two higher officials of the company allegedly misused their influence over the models and
made them unable to stand up to their rights.

Sexist culture coming to light

In January 2021, the senior leaders of the company were sued by Nancy Lambrecht –
shareholder of the company for breach of their duties and enriching the company with bullying,
misogyny, and sexual harassment, upon hearing the misconduct reported by The New York
Times and other publications. The lawsuit was filed in the court of chancery of the state
Delaware.

The Company’s Litigation

Parties

Plaintiff Individual Defendants

Nancy A. Lambrecht Defendant Leslie H. Wexner
 Co-Trustee for the Amanda L.  Founder of the company
Greenfield 2012 Trust (the “Trust”)  Former CEO
 A present shareholder in L Brands and
has previously been a shareholder Defendants Donna A. James, Michael G.
Morris, Robert H. Schottenstein, Stephen G.
Steinour, Patricia S. Bellinger, Sarah E. Nash,
Anne Sheehan and Abigail S. Wexner
 Currently directors of the company
Defendant Edward G. Razek
 Former Chief Marketing Officer
 Most connected with the case

All the above individual defendants failed to protect the brand image by breaching their duties to
act ethically. Because they are high ranking personnel of the company and their capacity to
manage corporate and business matters of L Brands, each of them is indebted to act in their best
interest and obligations to present devotion, diligence, impartial supervision, ethical
management, and legal manner. They had to an obligation to assert, implement, follow, enforce,
and execute these ethical conducts and compile by these requirements which they all failed to
oblige to. Not only did they fail to oblige to these ethical rules but also encouraged each other
knowingly and allowed the misconduct to retain in the workplace for a longer period.

Jurisdiction
Delaware corporations were deemed to have authority to hear the case of the Individual
defendants. The subject matter is within the jurisdiction of this court.

The misconduct
Edward G. Razek commenced employment in 1983 and left the organization in 2019 after
receiving repeated accusations from the public for allegedly contributing to the Company's
ingrained culture of misogyny, bullying, and harassment. Throughout his tenure, he preyed on
multiple Victoria's Secret models, and the victims frequently complained about him. However,
Leslie Wexner took disciplinary actions against the retaliator by concerning the models’ career
safety and termination of contracts and were not entertained.

Not only did Razek harass models but also female employees at Victoria’s Secret. Monica Mitro
– executive vice president for Public Relations until late 2019, repeatedly complained about
getting harassed by Razek. Nevertheless, every presumably informed individual defendant did
not take any legal and ethical actions against Razek and turned a blind eye.

Obligation
Every member of the board bearded the responsibility to oversee the business operations.
Considering the Company’s history on misconduct the board and directors have been poorly
overseeing the company by evading their responsibilities. Moreover, the brand also violated their
company’s value – “building a culture that fosters mutual respect, open communication and
sharing”.

They violated the company’s code of conduct such as; Leading with Values, compiling with the
Code of Conduct, Senior leaders responsible to create encouraging workplace, Civility and Anti-
Harassment, and Avoiding Conflicts of Interest.

Damage caused
Plaintiff claims that such misconducts and failure to perform the obligations by the senior leaders
in the company have caused the company to waste important business resources and use
corporate expenditures on unnecessary things.

L Brands has suffered considerable losses because of the alleged malfeasance, including
monetary loss as well as harm to its goodwill and corporate reputation. The Individual
Defendants purposefully broke their fiduciary obligations and willfully violated their corporate
obligations and caused a sustainable damage to the company in terms of both money and the
goodwill and image of its company.

Prayer for relief

Considering the above causes, Plaintiff respectfully asked for the following judgment against
each of the defendants:
 1. Establishing the Individual Defendants as having violated their fiduciary obligations to L
Brands and holding them accountable.
2. Proper compensation for the company by Individual Defendants for the damages caused
because of their breach of code of conduct.
3. Implement and adopting therapeutic relief to prevent such conducts.
4. Awarding Plaintiff the costs of this action including attorneys’ fees, accountants and
experts’ fees, costs and expenses.
5. Providing for any additional remedies that may be necessary and available under the
relevant laws.

Lawsuit Settlement and relief

(Fickenscher, 2021) reported that L Brand – owning Victoria’s Secret and Bath & Body Works
agreed to settle the shareholder claims and lawsuits on sexual harassment, misconduct, and
misogyny. They announced a $21 million settlement, ending two shareholder complaints that
both named former L Brands chairman Les Wexner and former Victoria's Secret chief marketing
officer Ed Razek.

It will include new management by promoting a secure, fair, and inclusive workplace. They
agreed to spend $90 million on implementing new policies in the company and to create a better
workplace for the next five years by.

Additionally, L Brands have agreed to release all the employees from the non-disclosure
agreement and has promised that the business will stop utilizing non - disclosure agreements in
response to complaints of this type.

L Brands gave rights to their investors to decide on their shares with the company for the first
time, allowing shareholders to select either Bath & Body Works or Victoria's Secret shares, or
both.

Former Victoria’s secret employee Razek was accused of harassment and assaults of women
associated with the company. Wexner was accused of taking a “laissez-faire approach to
oversight” of the company. Wexner and Razek were both exempted from indictment by the
settlement.

On May 16, 2022, the settlement addressing the shareholder claims against L Brands was given
final approval by the court.

The modification
The brand is going under a massive rebranding. They even announced hiring some of the high-
profile women as spokesperson like Priyanka Chopra Jonas and Megan Rapinoe.

They are cancelling their iconic runway for the Angels and started The VS Collection, hiring
diverse group of women that also includes transgender model. It was created to work towards
strengthening relationships for lingerie brands. Additionally, new associate programs, product
lines, content, and support for significant causes relevant to women are being created.

Key Takeaways

 Policy alone isn’t enough if we don’t enforce it properly.

 A business under any circumstances must act ethically and legally.
 Victims of sexual harassment cannot or fear reporting due to fear of losing their career.
 When harassment in the company is an open secret, it creates an unethical working
environment.
 Training on harassment is essential in the business to show that such behavior is against
the law and company’s value.
 Employees or the victims will be affected with the harassment trauma for the rest of their
life.
 Must encourage the victims to report any inappropriate behavior which are against their
own will.
 A company must be open to adapt new changes in its environment, like Victoria’s Secret
failed to be inclusive by focusing only on their fantasy image.
References

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partnership. take a closer look at how the concept was born - and why the lingerie chain
thinks angels are no longer relevant. Business Insider. Retrieved November 12, 2022, from
https://www.businessinsider.com/victorias-secret-angels-rise-history-iconic-models-
photos-2021-6#when-the-show-aired-on-tv-viewership-numbers-sank-by-34-16

YouTube. (2021). Brave supermodel exposes the dark side of Victoria's Secret | 60 Minutes
Australia  . YouTube. Retrieved November 14, 2022, from
https://www.youtube.com/watch?v=yeuDcNfogME. 

Leonard, M. (2021, January 13). Wexner, L Brands Board sued for Epstein ties, harassment
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