Practice of Entrepreneurship

Case Study (MMM038) – The meteoric rise and rise of Agent Provocateur

Sambhav Bhandari
21027281
MSc Entrepreneurship and Management

The small-scale company, which I have decided to do this case study on, has become synonymous with luxury lingerie the world over. It has become the epitome of upmarket couture lingerie - Agent Provocateur. The company had very humble beginnings and set out to do something completely different than what it has become today a ‘brand’. Founded in 1994 by Joseph Corre and his ex-wife Serena Rees, Joseph Corre saw that the state of fashionable or ‘sexy’ lingerie was pretty much non-existent in the UK market and as he says that he was absolutely disappointed after a visit to an Ann Summers store and thought the state of fashionable or sexy underwear could be changed altogether. What is intriguing I would say is that Joseph Corre having come from a very illustrious background, being the son of Vivienne Westwood and music manager Malcolm Mclaren, Joseph Corre worked for Vivienne Westwood previously before deciding to identify this potential gap in the market. The initial idea of the founder was to start a store that stocked creations from other brands, things that were too erotic for mainstream and at the same time acceptable by women. Having travelled to Paris and Los Angeles Joseph realized that even if he wanted to stock the lingerie he had the vision for there was nobody that was making it during this time period. Design and manufacturing or for that matter creating their own line was never really part of the plan for the now leading player in its niche. They set up their first store on December 8th 1994 on Broadwick St, Soho in London. Joseph recognized that women were just recovering from the 90’s recession and their ‘power dressing’ therapy from the late 80’s and were getting in touch with their feminine side. After setting up the first store and an initial rent of GBP 7000 in the first year Corre and his wife had received a return on their investment in just 3 weeks as it was fairly small as well. He had found a way of putting women in their underclothes without being sleazy.

“I had queues around the corner until after Christmas. I made my money back in just three weeks. I'd never seen so much press and around one shop. I thought, 'This is brilliant.' Every bloody newspaper and magazine had an excuse to put a sexy person in underwear in their publication, without being sleazy” – Joseph Corre

The growth of the company really started after the success of the first small store what they started in Soho, London. Marks & Spencers which is one of the largest british retailers with a very a big global presence approached Agent Provocateur to do a line for them. This really set the companies future to greener pastures

"It was quite mad going from having that one store in Soho, then having such an effect on the nation as a whole. Serena [Rees, estranged partner and co-founder] used to see girls at her gym in grey Calvin Kleins. Suddenly, after we did M&S, these girls in the gym were wearing sexy, sheer underwear. It was amazing to be able to change things."

As the company became a nationally recognized brand, all kinds of women felt that they could just about get away with the amount of sexy that Agent Provocateur was providing. What really went on from there is the genius of the founder as the company had a very small advertising budget and could not really spend enough money on elaborate hoardings and campaigns, Kylie Minogue who was a regular at the store was asked by Joseph if she would be willing to come in a campaign for them, she obliged and with creative inputs in the commercial from the founder himself they shot a campaign which is still talked about today nearly two decades later, because somebody at the editing studio stole it the video featuring Kylie Minogue in Agent Provocateur lingerie went viral and was making news world over. This campaign marked what the brand witnesses till today, customers want to collect campaigns and take pride and time in picking things from very specific campaigns, in my opinion this worked very well as it managed to create a want or a lust for its product by already having a erotic and risqué feel to it which no other brand has managed for a very long time in this industry. They were giving women the room to explore a side, which they felt they never had but always wanted to explore.

The problem I would say that the company really faced at this stage of growth was that they were out there in a very niche or non-existent market altogether firstly, secondly they did not have enough capital to put their message across or reach audiences far and wide and they needed to grow and fast in order to create a better market audience for their products. Joseph Corre managed to tackle these problems with great zeal as he collaborated with Marks&Spencers which put them on the map nationwide, secondly he decided to make do with whatever he had, from painting the store by himself to hiring his then friends Kate Moss, Peaches Geldoff and Daisy Lowe to appear in his campaigns. Kate Moss repeatedly appeared in his campaigns for a third of the costs she normally charges. So these problems were handled with rather brilliantly after obviously having a brilliant product range that solved a ‘problem’ for the women of the country, the solution: sexy. The early 2000’s saw a meteoric rise for the company as the 2001 commercial with Kylie Minogue went viral and was banned on televisions only being screened at cinema screens as an advert but by then it was available online on the far corners of the globe. Supermodels like Kate Moss And Peaches Geldoff had already sensationalized the ad campaigns, post this era came the wave of growth of the internet and Joseph Corre soon realized the power the internet possessed.

The company was always in the news maybe the right or the wrong publicity, but as they say publicity of any kind was always good. Joseph Corre being the eccentric man he is decided to public his thoughts on say politics or global situations using his window displays, especially during the Iraq invasion where window displays had mannequins with boards that read ‘Weapons of Mass Distraction’ and ‘The only Bush I trust is my own’ taking a jibe at George Bush the then president of the United States. He publicly made his dislike for Tony Blair evident through stints like these and refusing to accept the MBE at the queens birthday honors list for his contribution to the fashion industry as a protest to Tony Blairs stand on the Iraq invasion and Civil liberties. This type of controversy kept both the owner and the company in the news.

The feel of a Agent Provocateur store was always very boudoir-ish, which they set out to do from the very beginning, from the walls painted black to the lace-lined lamp shades, dimly lit stores and beautiful attendants in their stores wearing trade mark Pink and Black satin with a very punk feel to it created an ‘aura’ about the store and by the time we started moving in the mid 2000’s men were being encouraged to make lingerie purchases for ladies, besides the comfort level created in the US and Canada by Victoria’s Secret for men shopping at lingerie stores it was not present anywhere else, this wave of revolution encouraged Agent Provocateur to welcome the men that were making purchases and rightly so it work fabulously in their favor as Victoria’s Secret made an entry into the UK market only in October,2012. Everything looked well for the company till 2007 as they were in the news constantly had great leaders in the form of Joseph Corre and Serena Rees. The couple started to grow apart and their personal relationship took a toll on the company as outbreaks in front of the staff only deterred their confidence in the leadership, eventually amidst a very high media speculated event they decided to get divorced which saw the company in the wake of either closure or a sale and Kate Moss decided to walk out as a face of the brand for personal reasons related to Serena Rees. They settled for a sale and in November 2007 sold the company to private equity group 3i for GBP 60 million and eventually signing on Maggie Gyllenhal as a face for the brand. As Joseph Corre very blatantly admits that he did not want to sell the company but the divorce left him with no choice, he still came of it with a good deal as he was GBP 40 million richer and is still the Creative Director of the company and ex wife Serena Rees was GBP 20 million richer in the process. Another problem the company faced was as the e-commerce wave was catching up and having realized the potential power the internet possessed Agent Provocateur needed to create a store online, which was not a major problem. The problem here was to create the same customer and store experience they had physically, which they finally managed to achieve and it was voted one of the best digital experiences in the world. The company today operates through almost 43 stores through a network of cities and employs about 130 people. It has moved from just being a erotic lingerie retailer to footwear, perfumes and erotic literature it is turning it self into a global ‘erotica’ phenomenon. The company looks to expand itself into the entertainment sector with an agreement formed between AP entertainment and Universal records, making available their literature, catalogues, campaigns and music compilations. The brand also recently started making lingerie for pregnant women when a customer remarked 'It's your bloody fault and now I have to go to Mothercare and buy some black baggy crap.' As a result of this they saw an unprecedented rise in their maternity wear as well. Very honestly, the problems the company has faced over the many past years it has been operating have also acted as a catalyst for creating their success, whether it was Kylie Minogues Ad in 2001, political remarks and protests or the feeling it created of being to risqué adopting the boudoir-punk feel. It all eventually worked in favor of the brand, which possibly saw the brand sell itself with a considerable profit for the visionaries behind it. The company very recently started making bedding and swimwear as well besides the existing products it was diversifying into. The financials of the company look fairly positive since its buyout as the number of stores have been increased to 55 and it has a wider global reach. From a loss on a GBP 8 million in 2007 the company went on to increase its profit in the subsequent years of GBP 2 million with turnover reaching GBP 15 and 20 million respectively. Since the company is private limited, there is not too much financial information that is public the last reported profit stood at GBP 3.3 million despite the aggressive expansion which has increased the product range and expanded the companies asset portfolio.

What I think the company did right:

Identified the gap in the market and eventually decided to go ahead themselves even though they very extremely small and had a meager budget to work with.

Decided to give the customer what they wanted and not what the customer did, that was a big risk the entrepreneurs took

Started small and used every form of help and publicity they could use, they were controversial but at least they were being talked about. They make did with what they had from painting the walls themselves to asking friends to model for them
Revolutionized Ad campaigns and steered away from conventional marketing, Joseph Corre went ahead and made the changes to the Kylie Minogue advert in 2001 much to the dislike of the ad agency – this is what sent them viral and talked about in places where probably lingerie was not even heard of. Comic characters based campaign featuring Joseph Corre’s mum Vivienne Westwood and the political jibes.

Create a very personalized experience for the customers, the customers eventually started to feel a ‘connect’ with the brand. Started identifying themselves with the brand.

Men friendly stores, that all of a sudden created a sense of a gift that was ‘OK’ to give to women.

The retail outlets and online store which were dark and dimly lit, with dark interiors lace and frills all around and punk influenced pink and black satin dressed staff in push-up bra’s and geek glasses with figure hugging dresses – the ‘works’. Online stores had catalogues and campaigns in full with one of the richest buying experiences.

A great leadership and a common passion for the concept that both Joseph Corre and Serena Rees shared and their collaboration on business skill and the marketing acumen they possessed they were virtually unstoppable.

The sale of the company at a profitable price and retaining the creative rights, which in my opinion would truly come from passion of the people who founded it.

Not a follower, but an industry definer in the field of lingerie. The company was not afraid to take bold steps and move away from the stereotype.

What went wrong for the company:

They were on an extreme end of the lingerie market where it could not exactly be termed ‘everyday wear’ maybe losing out on the masses.

Highly controversial approach to their marketing and advertisements. The ban on the 2001 Kylie commercial, outburst on political views through the stores.

Personal fall out between the directors led to the ruin maybe of what may have been a larger phenomenon globally. (Not that it is not right now)

Sale of the ownership of the company.

The company is slowly losing its core values in the process of commercialization as they are selling an array of products and lingerie has become another product in its stable, the private equity firm 3i like the others in the business looks at this from a business point of view and would unite heaven and earth to keep their investors at bay and churn money out of this. Which I feel somebody as passionate as Joseph Corre and Serena Rees did not even dream of doing over their 15 years of ownership.

Bibliography:

http://www.3i.com/media/press-releases/agent-provocateur-profit-nearly-triples-to-33m.html

http://www.3i.com/portfolio/companies/agent-provocateur.html

http://en.wikipedia.org/wiki/Agent_Provocateur_(lingerie)

http://en.wikipedia.org/wiki/Joseph_Corr%C3%A9

http://www.lingerie-direct.co.uk/articles/History_of_Agent_Provocateur.html

http://www.livingthebrand.org/USER/Agent_Provocateur.html?CompID=2&pageId=18&componentContentID=6

http://www.guardian.co.uk/lifeandstyle/2009/may/03/joe-corre-agent-provocateur

http://www.managementtoday.co.uk/news/767531/agent-provocateur-sold-bust-up/