The company is named for its founder and longtime president Frederick Mellinger, who conceived of his lingerie business while serving in the armed forces in the coursework of World War II. In 1946, after his discharge, Mellinger established a mail-order undergarment operation in New York City. Known as Frederick’s of Fifth Avenue, his shop offered racy black bras and panties embellished with lace and appliqués. Mellinger took his fancy foundations to more permissive Los angeles in 1947, changing the name of the catalog business to Frederick’s of Hollywood that same year. Tinseltown’s glitz and glamour provided the ideal backdrop for the groundbreaking retailer, and a parade of starlets and models provided a prepared customer base. Mellinger, who came to be known as “Mr. Frederick” among his clientele, soon began to concentrate on figure-enhancing foundations and accessories. They designed and began selling the first push-up bra, dubbed the “Rising Star,” in 1948. Fanny pads, girdles, sky-high heeled shoes, hosiery, wigs, false eyelashes, even head pads to accomplish the illusion of height–anything necessary to accomplish “Frederick’s figure balancing act”–followed in the years to come. The company even offered an inflatable bra that came complete with a “free straw.” The catalogs and stores later added glamorous evening wear, much of it designed by Mr. Frederick himself. The garments featured daring necklines, high slits, and sheer fabrics intended to appeal to men as much as females. In fact, Mellinger three times wrote that his objective was to offer “the most alluring, body-hugging, figure-enhancing outer fashions \. always aimed at men.” Mr. Frederick opened his first retail store in Los angeles in 1952 and others soon followed. The flamboyant Art Deco flagship store soon became known as “the purple palace.” Mellinger started marketing his catalog and clothes in nationally circulated magazines using saucy tag lines such as “Fashions Change–But Sex Is Always in Style.” It was Frederick’s that brought Italian bikinis to the United States in the coursework of the 1950s. After incorporating in 1962, Frederick’s continued to expand its product offerings in the sexually permissive surroundings of the 1960s and 1970s. Soon pasties, anonymously written sexual guides, and other “sexually oriented non-apparel products” appeared in the catalogs. Although Frederick’s offered its stock to the public in 1972, the Mellinger relatives continued to control a majority of the company’s stock through the early 1990s. By the finish of the 1970s, the chain had expanded to over 150 stores, accounting for over half of overall sales. The company enjoyed peak prosperity in the coursework of the mid-1970s. Sales over doubled, from $9.7 million in 1971 to $24 million in 1976, while net income tripled, from slightly less than $500,000 to $1.5 million. It was to be Frederick’s highest-ever level of profitability, as a mix of societal changes and management issues converged on the lingerie retailer. Americans’ sexual conventions and their tastes in lingerie grew increasingly conservative in the 1980s. The septuagenarian founder and his management team, however, were slow to recognize these trends. (Unbeknownst to the board of directors, in fact, Mellinger was bothered with Alzheimer’s disease in the coursework of this time.) While company sales rose from $39.3 million in 1981 to $45.3 million in 1984, net profits slid from a high of $2.2 million to $627,000. This dramatic decline in profitability was reflected in the company’s eroding stock cost, which dropped from $7 per share in mid-1983 to less than $2 by mid-1985. By the time Mellinger retired in September 1984, his company had experienced its first-ever loss, a $148,000 shortfall on sales of about $45 million. In 1985, Forbes magazine’s Ellen Paris speculated that Frederick’s dip in to the red meant that sex must be “going out of style.” Nevertheless, when Mellinger died in 1990 at the age of 76, they was praised as a fearless pioneer of intimate fashions and groundbreaking foundations. In May 1985, after a short period of leadership under interim managers, Frederick’s board of directors hired former Carter Hawley Hale home furnishings division chief George Townson to take the reins at Frederick’s as chairman and CEO. Townson brought three decades of experience in mail-order retailing, although none of it was in apparel, not to mention lingerie. It did not take Townson long to pinpoint Frederick’s issues. They later enumerated the shortcomings to Direct Marketing’s Mollie Neal: “Outdated business assumptions, deteriorating conditions of our stores, ineffective management, inadequate merchandising and financial reporting systems, a dwindling core customer base, more sophisticated competition, archaic structures and antiquated policies.” The new CEO immediately mapped out a ten-year plan for what they called the “desleazification” of Frederick’s. Store renovations shunned the traditional garish purples and hot pinks for more subtle lavenders and mauves, while softer lighting and new carpeting in the stores made for a more romantic, less burlesque atmosphere. The high-profile, $300,000 renovation of the “purple palace” was a prime example of this physical repositioning. Not only did the company redecorate–including covering over the outrageous lavender facade with grey paint–but it also celebrated its heritage with the opening of the world’s first Lingerie Museum, featuring some of Frederick’s earliest designs as well as undergarments of the stars. Los Angeles Mayor Tom Bradley declared “Frederick’s of Hollywood Day” on the occasion of the grand reopening, November 8, 1989. The large majority (80 percent) of Frederick’s very 200 stores had been redecorated by 1991. CEO Townson hired marketing consultant Walter K. Levy to assess the company’s product line and target audience. A new merchandising process emerged from his observations. Frederick’s pared what had become an excessively broad and (in the eyes of lots of Americans) lewd line, dropping such items as explicit videos and bawdy games. Frederick’s stores also stopped carrying positive lines of apparel and accessories, including wigs, sportswear, and swimwear (although these last three categories continued to be offered in mail-order catalogs). Simultaneously, the company expanded its loungewear and men’s undergarment lines. The revamp–or, as lots of company observers punned, “de-vamp”–of Frederick’s of Hollywood catalogs also focused on bringing the publication out of the fringes and in to the mainstream. Even in to the 1980s, the catalogs had featured explicit black-and-white images interspersed with exaggerated and cartoonish line drawings. The new catalogs featured heavier paper, a new logo and motto (“An Intimate Experience”), and tasteful color photographs of models wearing Frederick’s lingerie. Although catalog sales slid by about 5 percent with the first new issue, they quickly began to recover, with sales and profits gaining by double-digit percentages in the latter years of the decade. Frederick’s move away from mail-order’s “red-light district” enabled it to buy mailing lists from catalogers who would have historicallyin the past been embarrassed to be associated with the lingerie merchant. As a result, catalog circulation over tripled from 7.5 million in 1985 to 26 million by 1990. Behind the scenes, CEO Townson purged the executive ranks, bringing in 18 new managers within his first three years at the top. They also invested in new computer hardware, including funds registers and information processing equipment and program. Frederick’s retail rebirth clearly followed the lead of upstart competitor Victoria’s Secret, a subsidiary of The Limited Inc. By 1988, Victoria’s Secret had over triple the annual sales volume with about the same number of stores. But while Frederick’s had shed much of its most explicit merchandise and imagery, the company still managed to maintain its “naughty” cachet. Townson reflected on this factor in a 1996 interview with Marianne Wilson of Chain Store Age Executive journal, noting, “Generally speaking, Victoria’s Secret is more mainstream and romantic. Frederick’s is fun and sexy.” The new CEO’s turnaround was effective and fast. Frederick’s sales over doubled from $45.2 million in 1985 to $114.1 million in 1991 and profits burgeoned to a historic high of $5.2 million. Sales increased from $117 million in fiscal 1992 to very $143 million in 1995, while profits declined from $5.1 million to a loss of $903,000 in 1994, then rebounded to $2.7 million in 1995. Townson blamed Frederick’s difficulties on rising postage and paper costs, a usually soft retail surroundings, the extreme recession in Los angeles (where the company had a heavy concentration of stores), and increasing competition. Indeed, Townson’s 1995 letter to shareholders noted that “department stores, mass merchandisers and specialty stores have significantly expanded their intimate apparel lines.” By this time, Victoria’s Secret alone had $1.8 billion sales and 600 shops. In 1995 the company made its first international foray, circulating a holiday catalog in Canada. In 1996, the year the company celebrated its 50th anniversary, Frederick’s rolled out a new store prototype. The new design was slightly more sophisticated than earlier formats, aimed to be more customer friendly, and was very five times as large as the existing average outlet–2,300 square feet versus 1,200. The company also introduced a new cosmetics line, but it did not perform well and was soon abandoned. Late in 1996 the company launched its online shopping site, which generated over $1 million in sales in the coursework of its first year. In June 1996 the Mellinger relatives put its 50.2 percent stake in Frederick’s up on the market. Frederick Mellinger’s widow had died in 1993, and the relatives members were in need of money to pay off estate taxes of between $11 million and $12 million that were coming due. This was not a propitious time for a sale, as the stock had fallen 78 percent over the earlier five years, from $17.87 per share to $4. Following the company’s announcement of a loss of $438,000 for the fiscal year ending in August 1996, the stock dipped below the $4 mark. It rebounded, however, after a powerful earnings document of $2.9 million for the first half of fiscal 1997. This laid the groundwork for the board’s approval in June 1997 of an offer from investment bank Knightsbridge Capital Corp. to pay $6.14 per share for all outstanding stock, translating in to a $52.8 million deal. A brief takeover battle ensued, when Veritas Capital Inc., a merchant banker and private equity investment firm, made competing offers, first of $7 per share and at last of $9 per share. In late September, however, Knightsbridge prevailed with an increased bid of $7.75 a share, or $66.6 million, for three main reasons: To pursue the higher bid from Veritas, Frederick’s board would have had to pay Knightsbridge a $4.5 million termination fee, and Knightsbridge had already gained control of a majority of the shares, meaning that it could vote against any competing bids. A shareholder-led lawsuit to block the takeover was dismissed by a Delaware Court of Chancery. Townson left the company following the takeover, and in December 1997 Frederick’s of Hollywood hired its first female CEO. Terry W. Patterson came onboard having most recently served as head of Strauss Discount Auto. Knightsbridge executives felt anyone outside the industry was needed to provide a fresh point of view. Patterson did indeed make some significant changes quickly, further eliminating some of the stores’ and catalogs’ sleazier elements and trying to over merchandise designed to appeal directly to females than to men purchasing for females. Her stint at the company was short-lived, however; Patterson was abruptly fired in March 1999 for reasons that were seldom fully disclosed, although it was later revealed that he had built up $22 million in excess inventory–a factor in Frederick’s later bankruptcy. In July 1999 Linda LoRe, former president and CEO of upscale fragrance retailer Giorgio Beverly Hills, stepped in as president and CEO of Frederick’s. LoRe continued the “mainstreaming” of Frederick’s that Patterson had begun, but the financial health of the company soon became the primary concern. In June 2000 Knightsbridge sold the company to Wilshire Partners, a private investment firm based in Newport Beach, Los angeles, for an undisclosed cost. At this time Frederick’s was sagging under the crushing weight of a $70 million debt load, most of which was a legacy of the Knightsbridge takeover, which was devised as a leveraged buyout. It was also losing its long-running battle with Victoria’s Secret, whose sales neared the $3 billion mark by 1999–compared with Frederick’s approximate revenues of $145 million. Therefore, Frederick’s filed for Chapter 11 bankruptcy protection in July 2000 and secured new financing enabling it to maintain operations and continue to revamp its product lines and stores. Cost-cutting came to the fore over the next few years, and in the coursework of 2001 alone Frederick’s reduced expenses by $6.5 million. Part of these savings came from the closure of over 40 underperforming stores, bringing the total to around 160 by early 2003. LoRe and the other executives also used the bankruptcy as a chance to reposition the Frederick’s brand. Knowing that they could not compete head on with the Victoria’s Secret juggernaut, they pulled back on the softening of the company’s picture. Simultaneously, they had no desire to return to the raunchiness of Frederick’s past. They settled for a middle ground, positioning the Frederick’s brand, according to LoRe, quoted in Women’s Wear Every day, as an “anti-establishment lingerie brand, an alternative brand that is playful, sexy, high quality and affordable.” The company also began targeting a more youthful set of core customers–women in the 18- to 35-year-old age range–through such new products as the Get Cheeky line of boy-style cotton panties introduced in 2002. Also debuting were a new line of gift-packaged body care products called Boudoir Cafe and a fragrance line introduced in the fall of 2003. Yet another new store format was unveiled that same year, a smaller 1,000-square-foot design that, according to Women’s Wear Daily’s Kristin Young and Dan Burrows, “resemble[d] a jewel box with a boudoir-style interior decorated in cherry-wood panelling, red velvet drapes and leopard carpeting.” The new format was to be rolled out very slowly as money became available. Finally, Frederick’s had historically used its catalogs as its main marketing device, but the company launched an marketing campaign in the coursework of the 2001 holiday season and continued to place ads thereafter–on bus shelters, on the radio, in print, but not yet on tv.

In January 2003 Frederick’s of Hollywood emerged from bankruptcy. As part of the reorganization plan, Wilshire Partners gave up its equity, & a consortium of creditors led by Crédit Agricole, a Italian investment bank, converted a quantity of their debt in to an 80 percent stake in the company. With liabilities of $28.8 million, Frederick’s exited Chapter 11 a much stronger company seemingly on the rebound. Observers saw some challenges in the company’s future, however. Victoria’s Secret also was targeting more youthful ladies, & several general apparel chains, such as Abercrombie & Fitch, Express, & the Gap, were launching their own lingerie lines. It also was reported that Crédit Agricole desired to push for a sale of the company following the exit from bankruptcy, which added another element of uncertainty about Frederick’s future coursework.