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Options trading 28. Victoria’s Secret is Out


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Options trading 28. Victoria’s Secret is Out

For decades, two men at Victoria’s Secret have had immense power. One built the chain into a powerhouse. The other ran the Victoria’s Secret Fashion Show, handpicking the models called “angels.” Then many started to question its standards of beauty. So what happens when the company won’t change? PLUS: Why is there a company called…

Options trading 28. Victoria’s Secret is Out

Options trading

For decades, two men at Victoria’s Secret have had immense power. One built the chain into a powerhouse. The other ran the Victoria’s Secret Fashion Show, handpicking the models called “angels.” Then many started to question its standards of beauty. So what happens when the company won’t change? PLUS: Why is there a company called Big Ass Fans?

Produced by Amy Pedulla, with Dan Bobkoff, Jennifer Sigl, and Sarah Wyman.

Options trading Transcript

Note: This transcript may contain errors.

DAN BOBKOFF: Shopping at Victoria’s Secret was once a rite of passage.

LISTENER: When I was growing up, Victoria’s Secret was everywhere.

LISTENER: The first time I went to a Victoria’s Secret was with my mother, I think I was probably 12 or 13, to buy the 5 for $25 underwear deal.

DB: Many of our listeners told us they have fond memories of shopping there in its heyday.

LISTENER: So when I was a tween, this was the mid 2000s, Victoria’s Secret was a very big deal. The semi-annual sale was a really big deal, and every 6 months there would be this giant sale, they would advertise it on TV. I remember the commercials being advertised and how exciting it would be, like ‘get all these discounts on really cute underwear and bras!’

LISTENER: It seemed like literally every single teenage girl in school shopped!

LISTENER: We’d go to Victoria’s Secret and I just remember the store would be so full of people, it was like Black Friday.

LISTENER: It was very fluorescently-lit, and it’s just piles of stuff.

LISTENER: And I just remember pawing through these bins of underwear and looking around at all these other women like furiously looking through the sale bins and just thinking to myself like, ‘alright. This is womanhood…’

DB: But then culture changed. Norms changed. And Victoria’s Secret…. Did not change.

It kept the razor-thin models called Angels and it’s fashion show, and the push up bras, and the ads promoting a perfect body. And then Ed Razek, its 70-year-old head of marketing, made some comments to Vogue in November.

ARCHIVAL: During an interview for Vogue, Razek used the word transsexual which is deemed outdated and offensive and said that trans and plus size women do not exemplify the fantasy that Victoria’s Secret is trying to sell. The exec also revealed that he and the VS team have previously thought of casting trans and plus size models, but ultimately decided against doing so. Razek said…

DB: Now many of Victoria’s Secret’s customers are losing interest in that version of femininity.

From Business Insider and Stitcher, this is Household Name. Brands you know, stories you don’t. I’m Dan Bobkoff.

Today: Victoria’s Secret… For decades Ed Razek and his boss have defined our standards of sexy. So why isn’t it working anymore?

And later, we found a company that named itself Big Ass Fans. Why?

Stay with us.

ACT I

DB: Mary Hanbury is a retail reporter for Business Insider. She’s been covering Victoria’s Secret for years, and she says one of the secrets of Victoria’s Secret is who started it.

MARY HANBURY: The company was founded by a man called Roy Raymond in 1977.

DB: So it was started by a man.

MH: Exactly. Yes. It actually came about because he was shopping for underwear for his wife and felt kind of embarrassed in the department stores doing so, and wanted to make a shop that… where men wouldn’t feel embarrassed about buying underwear for their wives.

DB: Why was he embarrassed?

MH: Well, I think he felt out of place in the store and was kind of looked at by the sales assistant… you know, ‘what are you doing in here? Why are you here?’ So the whole like concept behind Victoria’s Secret, the origin of it, centered around creating a store for a man. For a man to buy underwear for women.

DB: Victoria’s Secret was designed to look like a boudoir. Raymond chose the name Victoria after Queen Victoria. He wanted to give the store the feeling of the Victorian era. Dark rooms with rich wood interiors, carpets, silk drapes. A place where men could go and feel comfortable shopping for their wives.

MH: At the time it was a pretty revolutionary idea as well because in the 1950s and ’60s, underwear was always about practicality and durability, so he was creating more kind of elegant and, I guess, racy underwear.

DB: Raymond started Victoria’s Secret with just $80,000. It had a few stores in San Francisco, a catalogue, and annual sales of roughly $4 million. By the early ’80s, it wasn’t doing so great and was almost bankrupt.

MH: So then at this point enters one of the most important people in this whole story, Les Wexner.

DB: Literally enters. Les Wexner — founder of the Limited — was already a legendary retail executive by the time he walked into a Victoria’s Secret in the early 1980s. He’d never seen this kind of sexy lingerie in a store in America.

MH: So he bought Victoria’s Secret off Roy Raymond in 1982 for a million dollars.

DB: $1 million.

MH: Yeah.

DB: That’s not very much.

MH: Yeah, he was kind of fascinated by it. He hadn’t seen anything like this before, he was like ‘this is an incredible idea.’

DB: But there was one thing he didn’t like about it. He thought it looked like a brothel. After all, it was a store designed by men for men. So after he bought it, he set a goal.

MH: ‘We want to make it so it’s a shop for women to shop in rather than men.’

DB: Wexner started to do some research about lingerie companies in Europe—where women had been buying lingerie as a staple for years. He was convinced that if American women had access to sexy, well-made lingerie, at an affordable price, they would buy it too.

MH: He kind of envisioned La Perla for the mass market. So he wanted to make lingerie that was that upscale but was affordable for women.

DB: Around this time, another man joined Wexner’s company, then called Limited Brands.

MH: So Ed Razek, who’s joined the company in 1983, which is a year after Les Wexner’s bought Victoria’s Secret, kind of over the next few years starts to build up part of the company and becomes more and more important. So in its… In its heyday, Razek is kind of one of the biggest, biggest names in the business.

DB: Razek rose through company and is now most known for producing the annual Victoria’s Secret fashion show. This is that televised broadcast where models walk a catwalk while top 40 artists perform. The models wear the latest collections and also giant wings.

2018 FASHION SHOW: Ok….what is Victoria Secret in 3,2,1 go! Off and running…rock and roll….

MH: Victoria Secret ran the first annual runway show in 1995. It kind of fitted into the brand’s narrative and the reason why the brand was resonating so well with people. It was creating this kind of desirable image where you know people wanted to buy into this. It’s showing these women that are with you know, unobtainable bodies strutting down the catwalk in like push-up bras. Razek is literally responsible for handpicking the Victoria’s Secret models that feature in that runway show.

DB: He’s the one that decides all that?

MH: Exactly. Yes.

DB: Wow.

MH: And so it rather than… It’s kind of different to a normal runway show where you would think that the designers would have control and they would choose the outfits, they would put things together and maybe even have a say over the models. That’s not how it happens at Victoria Secret. This is like a very different kind of fashion show.

DB: And this makes the career of a lot of up-and-coming models. So is it, is it basically Ed Razek deciding what our beauty standards are?

MH: Pretty much, yeah. And I mean back in the day in his heyday, like the early 2000s, he was like one of the biggest names in, or, considered to be one of the biggest names in modeling. He’s kind of generally credited for helping to launch the careers of these models.

DB: Razek had a lot of power. And he used it to make Victoria’s Secret the underwear store for supermodels. He brought high production values. He hired famous movie directors to shoot commercials.

MH: And this is when they’re doing some of their biggest marketing campaigns. So things like English Lace—

VICTORIA’S SECRET AD: English Lace, possibly the world’s most beautiful bra, is now available in more colors than ever!

DB: In 1997, English Lace was billed as “possibly the most beautiful bra in the world.” But even though it created a lot of buzz and drew people to stores, some complained the bra didn’t fit right. But Razek kept going. The same year, the Dream Angels campaign launched.

MH: Dream Angels, which is when of the concept of Angel… Of the Victoria Secret Angel came about.

VICTORIA’S SECRET AD:

Victoria’s Secret introduces Angels…

We’re not those kind of angels…

I try to be an angel.

Well, if she’s an angel, I’m a…

Don’t say it, Karen!

MH: And Miracle bra.

VICTORIA’S SECRET AD:

Do you believe?

I didn’t believe. I didn’t believe.

Do you believe?

Only Victoria’s Secret has the miracle bra.

Get a miracle bra!

Miraculous. Miraculous. Miraculous.

I believe.

MH: These campaigns featured now some of the most famous supermodels of the past few decades: Tyra Banks, Helena Christensen… dancing in this like sort of hazy setting with a British accent narrating. And this is where the concept of them selling this unobtainable body kind of really started.

DB: This is Razek and a casting director in a CBS documentary about the making of a Victoria’s Secret angel back in 2010.

ED RAZEK: Today we’re in the new casting room. We’re trying to cast the final 28 girls.

CASTING DIRECTOR : We’re looking for the right proportions. Gorgeous hair, skin, a great personality. And just…glowing beautiful women.

DB: That’s not to say the company was completely out of touch with what women wanted.

In 1999 the company launched Body by Victoria: seamless bras that were sexy and practical. Body was a massive success. It was more successful than any other Victoria’s Secret bra, selling far faster after launch. After six weeks, the bras were almost completely sold out.

But then women started drifting away from the brand Razek had spent years building with Wexner.

Those women who grew up shopping at Victoria’s Secret in the early 2000s were asking more questions now. They were starting to challenge the brand’s standards of beauty.

MH: This is a brand that now in the wake of #MeToo just… just feels outdated and rival brands are popping up that are focusing on body positivity, women’s empowerment. Like what’s Victoria’s Secret which is still the biggest lingerie retailer in the US, what’s it doing?

DB: The drift away from Victoria’s Secret started slowly, but really came to a head at the Victoria’s Secret fashion show last year. Historically, the televised runway show had garnered massive viewership, but it fell off a cliff. It fell from 7 million viewers in 2016, to just over 3 million people last year, a record low.

MH: Sales are still slipping and only last month it announced it’s closing dozens of stores. So the future is kind of… is looking a bit shaky for the brand, and I think a lot of its critics are just you know saying, ‘if you were to bring in more sizes, be more body inclusive and maybe just maybe feature plus size models in the runway show that you know, it has a good chance of fighting back.’ It still has like the lion’s share of the market so it’s in a still in a position of power. It’s just really up to whether the brand wants to.

DB: Coming up: how will Razek and Wexner respond? That’s in a minute.

ACT II

DB: We’re back.

What’s amazing is that after all this, Razek and Wexner haven’t changed that much about Victoria’s Secret. Wexner’s been running the parent company, L Brands, for ages, and doesn’t want to mess with it.

MH: You know, these two men still feel that the brand has no issues fundamentally, maybe sales have slipped, but they have this tried and tested formula. Les Wexner has been CEO of the company for 53 years, you know….

DB: 53 years!?

MH: Yeah…

DB: That’s a long time to be CEO.

MH: He’s the longest running CEO of any Fortune 500 company.

DB: Wow.

MH: So, you know, it’s a tried and tested formula. It’s worked really well, they’ve had incredible success but you know times have changed and I think that these these two men are kind of resistant to change really. You know, based on conversations with former employees, these two men have full control over the brand.

DB: Here’s how power works at L Brands. Wexner runs that parent company, and then there are other CEOs of the various Victoria’s Secret businesses, like lingerie and its teen line PINK. Those bosses report directly to Wexner.

MH: Razek reports directly to Wexner rather than reporting to the CEO of Victoria’s Secret lingerie, for example, so…. That’s creating issues for the CEOs, which is why there’s been a fairly rapid turnover of management there. And, with Ed Razek’s having full control over how the brand is portrayed, these CEOs have no power to be able to change that.

After Sharen Turney, who was CEO for a long time, left in 2016, Wexner split up Victoria’s Secret into Victoria’s Secret Beauty, Victoria’s Secret PINK and Victoria’s Secret Lingerie. So there are three CEO heads of those businesses, and then Wexner oversees the entire business. But the problem is that if you are the CEO Victoria’s Secret lingerie, for example, and you have an issue with the marketing, there’s really nothing you can do about it ’cause Ed Razek has full control over that and he doesn’t report to you. He reports to Les Wexner.

These employees said that Razek is basically untouchable in Les Wexner’s eyes. This, this is a duo that have been together since you know, well Razek’s had a major role in Victoria’s Secret since 1995. And with Wexner as the largest shareholder of the company, CEO of the company, and chairman of the board, Razek isn’t going anywhere.

DB: We reached out to Ed Razek and Les Wexner for this story. Both declined interviews. They’re both still in their jobs at L Brands and Victoria’s Secret, and they’ve shown no sign of changing their strategy.

MH: Where you know, other brands have are now coming in and changing that and turning the US underwear market on its head, essentially.

DB: So who are the biggest competitors for Victoria’s Secret now?

MH: So Victoria Secret still has the largest portion of the lingerie market in the US, but increasingly new brands are popping up. So, there’s a there’s a buzz around them and they’re growing very quickly and while Victoria’s Secret is kind of shrinking and closing stores, these brands are growing.

So the name that gets mentioned a lot in contrast to Victoria’s Secret is American Eagle’s Aerie brand, which has achieved explosive success over the past few years and is now opening more stores, and it is one of the most profitable areas of American Eagle’s business. And the interesting thing about Aerie is that the whole like premise of the brand is to promote female empowerment and body positivity. And it’s had a lot of success since 2014 when it basically said that it would stop photoshopping any of its ads.

AERIE AD: We make bras, undies, swim and so much more for every girl. We’re also real. Aerie Real is our commitment to body positivity and no retouching on any of our girls. Ever. Ever.

MH: That’s been very very successful for the brand. I think a lot of people see that and say and they have like extended sizes, plus size models… ‘Why you know, why isn’t Victoria’s Secret doing something like that?’ Then you have the smaller online brands such as Third Love, Lively, True & Co. They they’re coming in now and seeing…. I guess seeing the opportunity here seeing Victoria’s Secret isn’t going to answer to this customer and they are filling a void now and coming in and saying ‘This is a new brand. This is for women. We’re marketing women. We want to make bras that are comfortable, underwear that’s comfortable. Not just like neon push-up bras…’ 

DB: Full disclosure… Third Love sometimes sponsors this show.

These companies saw where Victoria’s Secret was falling short, and they capitalized on it. As of last November, L brands shares had already lost more than two fifths of their value and they declined more than 4 percent after the company reported earnings that month.

MH: The sales have been down since 2016. Just announced that they’re going to be closing stores this year. 53 stores. It has been addressed by management. Their CFO of L Brands recently said like ‘everything’s on the table. Now, we’re going to be looking at everything marketing product, etc.’ So, you know, there could be… could be optimism ahead for the future and that they are beginning to take this really seriously now. But the fact of the matter remains that these other brands are slowly chipping away at their market share, so they need to act quickly.

DB: Are investors still on board with the Wexner – Razek vision of Victoria’s Secret?

MH: Analysts have become more aggressive in pointing out their weaknesses, saying like they need to sort out the stores, you know, they’re too dark. They’re overtly masculine. The ads need to change, they need to wake up to the times, essentially. And what’s interesting is that shareholders have become more public about this as well. So in March, the CEO Barrington Capital, which is a shareholder in L brands, he wrote a letter to Les Wexner, telling him that… Advising him to update the brand’s image which he described as tone deaf and switch up its board if it wants to move ahead with the future and like resume positive sales growth again.

And they then called out not only Razek in the letter saying that he’s done a poor job of stewarding the brand and marketing the brand, but also mentioned its other rivals as like, you know things that they should be following… Aerie, Third Love for example.

L Brands responded on Les Wexner’s behalf saying that they were addressing growth issues by… they’ve just sold La Senza, one of their businesses, closed Henri Bendel, but they didn’t address the actual marketing side of Barrington Capital’s concerns.

DB: So Wexner responded by saying that the company would close some stores. That addressed shareholders’ financial concerns. But – he didn’t address the bigger issue – the widespread criticism of Razek, who just months before had made those controversial comments about trans and plus size models to the Vogue reporter.

DB: So alright. So Razek does not do himself any favors by making these comments back in November. What were the reactions in the industry to that?

MH: So it’s interesting that it you know, it wasn’t just at an outcry online by customers, a lot of models also spoke out against it, including I think, which is most interesting Kendall Jenner, who walked the runway show. So she would have been selected by Ed Razek. And she put up a post on Instagram in support of transgender models.

So another interesting response I thought was from Carmen Carrera who is a transgender model, and a couple of years ago she was rumored to be becoming the first transgender model for Victoria’s Secret. And she responded to Razek’s comments on Instagram saying that she was invited to attend a Victoria’s Secret casting but then the casting was canceled that morning. So she said ‘I don’t understand if these casting folks just like to make you suffer on purpose or if they just wanted to rejoice in their own foolery after they cancelled it.’

DB: And the women who shopped at Victoria’s Secret years ago… they also noticed Razek’s comments.

LISTENER: When I heard about what the marketing executive, Ed, said to Vogue, I was grossed out but not particularly surprised because one: he is a 70 year old white man who is an executive at a lingerie company…

LISTENER: When he made those comments, I was just like ‘you know what, it’s no longer 2004. There are other options.’ It’s crazy to me that they don’t… make bras and underwear for plus-size women, because that’s a huge part of the market! I don’t know, I want a brand that first of all is going to be there for all women, and then also going to be there for me! Like, you know, my boobs might get much bigger. Or they might get much smaller. My ass might get much bigger, or much smaller. I want to go to a place that is going to be there for me for whatever change my body goes through, and I want it to be there for women, no matter what change their body goes through, or no matter what size their body is. I think it’s just stupid.

LISTENER: You walk past their windows and see their promotional shoots, and it’s pretty clear what image they’re going for.

LISTENER: The product is a skinny, tall, extremely thin, six pack abs body, with like an extremely generous chest.

LISTENER: If they wanted to showcase a more diverse group of women, they could and would, but they do not.

LISTENER: Yeah, they should, they should show women. All women.

DB: So did Razek ever apologize for his comments?

MH: Two days after the comments went viral, Razek issued a formal apology.

DB: What did he say?

MH: So Razek said “my remark regarding the inclusion of transgender models in the Victoria’s Secret Fashion Show came across as insensitive. I apologize. To be clear, we absolutely would cast a transgender model for the show. We’ve had transgender models come to castings and like many others, they didn’t make it. But it was never about gender. I admire and respect their journey to embrace who they really are.”

DB: How do people feel about this apology?

MH: A lot of people felt that it was insincere and not particularly, not particularly apologetic.

DB: Right. He says it came across as insensitive. He’s not saying it was insensitive.

MH: Exactly. So this kind of made people more angry in a way, and they were like, you know, ‘what is this guy doing and why is he not stepping down?’ And actually I… I spoke to a crisis management expert. Who would deal with situations like this where you know where an executive could make a similarly offensive comment, and he said in those cases there is precedent for people stepping down. Not always, but it can happen. But he ultimately said that any person that makes a statement like that does not have a place in 2019, and the fact that Victoria’s Secret has kept them on means that they’re just not taking this issue very seriously.

DB: So after all this, what can and what should Victoria’s Secret do?

MH: So I think the first thing they need to do to be taken seriously with this is include plus-size, transgender models in their runway show. Update their runway show so it… So people, you know can see that they’re listening to criticism and actually making real change. I think they have incredible opportunity, you know, they… they’re still the biggest… They still have the largest portion of the market and they have this incredible platform to do what they want. You know, like these smaller brands don’t have nowhere near the amount of Facebook or Instagram followers. Like they have this opportunity to do incredible things and I’d you know by no means think this is the end of Victoria’s Secret. I just think that they need to wise up and and make changes to keep themselves relevant.

DB: You know, after all these decades of being the company of Miracle Bra and fashion shows and Angels, can they really turn into something very different? Something more body positive and inclusive?

MH: There are some good changes that have already happened this year. They have a new CEO for Victoria’s Secret lingerie. He’s just joined. And they most recently signed up Barbara Palvin to be the latest Victoria’s Secret Angel, and a lot of people were applauding that online saying that even though she isn’t plus-sized, they viewed her as to be more body inclusive. She’s not like the typical sort of rail-thin Victoria’s Secret Angel. So that’s been a great step and such a small step to make, but but people seem to be responding to it very well.

DB: So, what do you think’s going to happen to Victoria’s Secret?

MH: I think now that shareholders have been more public and getting involved, I think that that is when things start to really change and maybe we’ll see Les Wexner stepping down and you know the business evolving completely under new leadership. But I think while he’s at the helm and if he doesn’t take— and him Razek don’t take a step back, I think we’re perhaps unlikely to see major changes just yet.

DB: Mary Hanbury. Business Insider retail reporter. Thanks so much.

MH: Thank you very much.

DB: Coming up, a company that makes a boring product with a surprising name. That’s in a minute.

ACT III

DB: It’s time now for a new segment we’re calling…. “What’s in a Name?” We think a lot about brands on this show, and every now and then we come across a brand name that makes us pause and wonder.

That happened to me when I saw the name of a company that makes ceiling fans. The company makes big, efficient fans… the kinds you’d find on the ceilings of gyms or temples or barns. These are huge fans, like 24 feet in diameter. And its sales pitch is high quality, high efficiency. And yet its brand name is a bit surprising. It’s… Big Ass Fans.

CAREY SMITH: My name is Carey Smith. Chief Big Ass, at Big Ass Fans.

DB: Is that actually on your business card?

CS: It’s on my goddamn luggage!

DB: (laughs) Were you always this profane or?

CS: No, it’s amazing, you know it was… I was… it was one of those things. I went to church every Sunday and nary a cuss word would come from me. I don’t consider that cussing, that’s just a… that’s a name of a… of an animal.

DB: Carey Smith founded Big Ass Fans in 1999 in Kentucky, and he built it into a big ass company with more than 600 employees and hundreds of millions of dollars in sales.

DB: So, I have to ask the main question, so why… why is your company called Big Ass Fans?

CS: Well, when we started we called the company HVLS Fan Company.

DB: Which is not very catchy.

CS: Really, you don’t think so? It’s hard for me to remember. High volume, low speed fans. When we started the company there were only about six of us and all of us answered the phone. And typically when we answered as HVLS Fan Company, there would be a pause on the other end of the line and the people would ask, ‘are you those guys making those big ass fans?’ Our potential customers were… were giving us a really good piece of advice. And after about a year and a half, we changed the name of the company to Big Ass Fans company.

DB: So bring me back to the meeting you had, in the… I guess it was what early 2000s? Where you’re talking about you know you want to change this name and this is the proposal on the table. What was that conversation like?

CS: Well it was a very short conversation because I was talking to myself. I mean I, I owned the company and so I might’ve discussed it with my wife and she, I’m sure, thought it was hilarious. And the people that I worked with, we all had the same… I think sense of humor. And I think that when you’re starting a company like that that were you have a product that is, that is unknown for the most part, I mean people have to be a little bit irreverent.

DB: Not everyone was a big fan of the new name. Carey and the team would get angry phone calls at work. He remembers one from a guy who was particularly irate.

CS: I got on the phone and this guy goes off on me about, you know how I disrespected he and his family by sending information through the mail….

ANGRY CALL: Hello, yeah, I understand you own this company?

CS: That’s correct.

ANGRY CALL: Why do you guys gotta put profanity in our mail?

CS: Well, I didn’t put anything personally in your mailbox…

CS: I said, well you know I’m really really sorry. I certainly didn’t mean to upset you. And if you’ll give me your name, I’ll make sure that we take you off the mailing list.

ANGRY CALL: You know what, I’m not gonna give you my name! You’ll just talk to my attorney…

CS: That’s fine. I look forward to it…

CS: He just went on and on and we recorded all of this. It was quite funny… or still is quite funny.

ANGRY CALL: Isn’t there anything else you could call your company? THIS IS WHAT’S WRONG WITH OUR SOCIETY

CS: And I guess I was laughing. I don’t know why I would have been laughing at this point.

ANGRY CALL: Yeah you think it’s funny don’t you?

CS: And that just set him off on another tangent.

ANGRY CALL: You’re an ass too!

CS: I am an ass, as a matter of fact, my title is chief big ass. So I’m definitely an ass.

CS: It was, it was it was hilarious.

DB: Did the lawyer ever call?

CS: Oh, of course not! For heaven sakes.

DB: The trouble didn’t end there for Big Ass Fans. In 2003 the company moved to a new headquarters. Carey commissioned a 40-food-wide mural of a donkey. He named her Fanny. And she became the company’s mascot. But the neighbors weren’t happy.

CS: It caused quite a ruckus. The city council, ‘oh my god, you can’t do things like that.’ The same person that was on the council that did that wouldn’t allow us to buy advertising in the airport. He was just a real pain in our you know, you know what.

DB: Carey told me about an old marketing campaign that made local headlines. The company sent out mailers that featured a picture of one of their fans next to… a donkey’s backside. Postmasters in Georgia, Mississippi and five other states refused to deliver them.

CS: We thought ‘well, that’s rude.’ But again, it’s good… it’s good marketing because we told everybody, ‘oh my gosh can you believe this? This is… this is terrible. We’re so notorious that the US mail won’t deal with us.’ So I mean, that was funny.

DB: So I have to ask you about another brand name. So your company is called Big Ass Fans, but one of your products is actually called Isis. Explain.

CS: We named that fan after a goddess and… that was about the extent of it. I can’t even remember exactly why we named it Isis but obviously had nothing to do with… with the terrorist group.

DB: So, just a coincidence. The Isis fan was introduced in 2009, before that name became famous for terror. And as the company continued to develop other new products, it had to convince customers it wasn’t losing its Big Ass identity.

DB: I was wondering, when you were… when you were launching your home line. Did you think about calling them small ass fans?

CS: Yeah, we did. Kind of, I mean it was it was one of those things where we actually had discussions about that. We didn’t have discussions about the Big Ass side. We did have discussions when we were… making smaller fans because then they really weren’t big ass. But we didn’t do that and what’s funny about that, we called.. the name of the residential fan was Haiku and it was very pretty and it was it was bamboo and super efficient motor, super efficient foil design and all of these different things and we thought well, you know, we’re selling to a different market. And it is Haiku, so we want to make sure that people know it was Big Ass Fans, but we’re going to put… Haiku is going to have the large font and the Big Ass is going to have a small font. And we had people call us and tell us that you know, ‘this isn’t right. I mean are you trying to run away from your name? ‘And it’s like no seriously you think that? And we actually had to shift that around.

DB: What do you mean by shift it around?

CS: Well, we had to make the Big Ass Fans a bigger font than the Haiku. The Haiku was downplayed.

DB: Carey sold the business two years ago, for a reported $500 million. I asked him how much he thought the name contributed to the company’s success.

CS: I think that the name helped quite a bit, but and I think that people imagine that we thought it was funny which, we did. And they imagined what it would be like working for a company that.. was so irreverent. You know, there’s more to life than the bottom line and I think people recognize that. Not just the people that are working for you, but your customers and they realize what’s going on. They understand that. The customers understood that we were we were a good a good company and that’s why we had the market share and that’s why we were successful.

DB: Why do you think it’s good as a marketer to have a name that’s making a few people angry?

CS: I mean, we just thought it was cute to tell you the truth. And honestly for every one of those people that, that was upset at our name there were 20 more that would write us or call us and say, you know, ‘Mary rode to Bethlehem on the back of an ass and… the Bible uses the word ass 46 times.’ We probably contributed to the coarsening of dialogue in this country. We didn’t mean to but that’s what people wanted and that’s what they asked for and it didn’t bother anybody. At some point. It concerned me that well, maybe I’ve sort of boxed us into a corner with this, but I don’t really think so. I think it’s important, in business anyway, not to fit in. And there’s no reason to fit in. And there’s lots to be said for… bucking the trend and that’s what we try to do.

DB: Thank you so much for your time. I guess we’ll call you Carey Smith, former Chief Big Ass of Big Ass Fans. Thanks so much for being on.

CS: Thank you Dan. I really appreciate it.

DB: Carey now lives in Austin, Texas where he runs a business incubator called Unorthodox Ventures.

CREDITS

DB: If you’re curious about a company with odd branding, we want to hear from you. You can send us an email at householdname@insider.com.

And if you want a sneak peek of what’s to come in season 3, sign up for our BRAND NEW NEWSLETTER! You can find it at businessinsider.com/household-name, that’s businessinsider.com/household-name or by clicking the link in our show notes. We’ll also post a link in our Facebook group. If you’re not already a member, search for Household Name Podcast.

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This episode was produced by Amy Pedulla, with Sarah Wyman, Jennifer Sigl, and me.

Sound design and original music by Casey Holford and John DeLore.

Our editor is Gianna Palmer.

The executive producers are Chris Bannon Jenny Radelet and me.

Household Name is a production of Insider Audio.

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