For more than 50 years, Frederick's of Hollywood has provided visual and tactile enticement for the bedrooms of America. Its salacious mail-order lingerie has both saved and ruined marriages via a trashy parade of leopard-print bras, crotchless panties and see-through teddies.
It all started during World War II. Official company lore has the founder, Frederick Mellinger, serving in the U.S. Army and daydreaming of beautiful girls. After his discharge, Mellinger vowed to offer lingerie for the masses, and produced his first catalog in 1947. Since that time, Frederick's has given us many firsts in the industry, including black lingerie, the Rising Star push-up bra (1948) and the bare-cheeked thong (1981). (Mellinger himself used to say, "Came in looking like a Chevy and left looking like a Cadillac.") Its lingerie museum, located at the company's flagship store in Hollywood, features brassieres worn by Marilyn Monroe, Natalie Wood, Isabel Sanford and Milton Berle.
But last week, when the company filed for bankruptcy, housewives and strippers foresaw the possible end of an era.
Although the Frederick's Web site has tripled its revenue in the past year and now brings in $10 million annually, company spokesman Seth Jacobson says it still isn't enough to trim an estimated $70 million in debt. According to Chapter 11 documents obtained by news sources, the company has been unable to sufficiently increase revenue or expand operations, primarily as a result of the lingering costs of a 1997 leveraged buyout.
Until last month, Frederick's had been privatized by Chicago investment group Knightsbridge Capital Corp. The firm was then purchased by Wilshire Capital, a Los Angeles investment firm. To help manage the financial restructuring, the company has enlisted Crossroads, a consulting company, and installed a Crossroads executive as chief operating officer. Frederick's CEO and president Linda LoRe will remain in her position.
In the $7 billion intimate apparel industry, which is dominated by Victoria's Secret, Frederick's claims the No. 2 spot, but realizes it must adapt to the changing market. "We've been trying to change our image for over two years, and I think we have," said Jacobson. "We like to see ourselves as having sexy, fun lingerie rather than what we were known for before, which was more risqui, trashy."
To that end, Frederick's is appealing to younger women with its Diva line of lingerie and H2O bras, which are filled with water. The chain also hopes to give much-needed makeovers to its retail outlets, which are basically time-capsule relics from the 1970s. New stores would look more like the Gap, with white walls and blond wood.
All this is contingent, of course, on whether new financing becomes available. The company says it anticipates receiving a $12 million to $15 million loan later this week.
Those thinking of the implications for the bedroom are advised not to panic just yet. Frederick's officials insist that polyester camisoles and zebra panties will still be available at the company's 200 stores across the country during bankruptcy proceedings.