IDENTITY CRISIS

In the lingerie industry, there’s a little man behind the curtain who pulls all the corset strings and his name is Frederick-of-Hollywood. Fred Mellinger passed away in 1990, but the company he started in 1946 is still the think tank of the undergarment industry. Yes, Victoria’s Secret gets most of the attention, but if Frederick’s CEO Linda LoRe has her way, the company will soon grab some limelight of its own, thanks to a re-branding campaign that has Frederick’s embracing its saucy heritage.

Mellinger, who moved into the flagship store’s current location on Hollywood Boulevard in 1947, started out on the cutting edge. His first product offering was black lingerie, something Americans had never seen outside of a French postcard. Most of today’s bra-wearers (and the people who love them) probably don’t know that Frederick’s also pioneered the padded bra and the push-up bra; sold the first bikini in California (it was a leopard-print number); and introduced the now-ubiquitous thong and the boy-leg panty to the American public.

But despite its persistent creativity, Frederick’s has been languishing for years-just like Hollywood. The city and its namesake company seemed clueless about how to update their tacky image. Today, when most Americans think of women’s lingerie, the picture that most likely comes to mind is of a Victoria’s Secret supermodel striding aggressively across the screen during a break in the Super Bowl. Every season the retail giantess kills Frederick’s with mega-selling versions of its innovative products (being first doesn’t count for much in the fashion business, where good ideas circulate freely). Now, as Hollywood attempts to pull itself up by the bootstraps, Frederick’s, the second-largest lingerie retailer in America, is doing the same.

How does a company announce its own retooling? with a party, of course. This spring, the “new” Frederick’s staged its first fall fashion week runway show in the Star Shoes bar/boutique on Hollywood Boulevard. The company previewed its fall line as well as its carnally delightful models. The party was so crowded that the fire marshal arrived to keep in check a horde that included a healthy number of extremely fashion-forward, if not quite A-list, celebrities. (If you can be a hit with both Melissa Rivers and the Red Hot Chili Peppers’ Anthony Kiedis, you’re certainly onto something.)

The fashion show is just one in a series of surprises that started three years ago when the Frederick’s owners, Wilshire Partners, hired a new CEO to shake the company awake. Linda LoRe is not a typical corporate turnaround artist, judging by the unlikely story of her rise from shopgirl to executive. As a young fragrance buyer at Robinson’s in the early ‘80s, LoRe saw an ad for a new perfume called Giorgio from a small boutique named Giorgio Beverly Hills. (The Giorgio name was starting to register on the public radar because it was mentioned in Judith Krantz’s fashion-industry potboiler, “Scruples.”) LoRe cold-called Giorgio and got through to the CEO, Fred Hayman. The rest of LoRe’s story reads, oddly, like a Judith Krantz novel.

Before she knew it, LoRe had single-handedly brokered a deal between Robinson’s and Giorgio that led to one of the biggest fragrance launches in history at that time. Going to work for Giorgio later, she worked her way up to CEO by repeating her success with another record-breaking fragrance launch, this time for Giorgio Red. LoRe spent 11 years at Giorgio, seven as CEO, before leaving in 1997 to develop a nonprofit entrepreneurial academy for disadvantaged youth.

In 1999, LoRe accepted the job of CEO of a decidedly disadvantaged company; Frederick’s was creaky, with outdated cash registers and a confused corporate identity. Before she could put her marketing ideas to work, she had to tackle a mountain of debt acquired during a 1987 stock repurchase and buyout that took the company from publicly held to private. Forty-four million dollars is a lot of debt for a company with estimated annual receipts between $200 million and $250 million. The o! nly way LoRe had a shot at reinventing Frederick’s was to seek Chapter 11 bankruptcy protection.

As for the business itself, the catalog and retail divisions treated each other like competitors, and the 200-odd stores were not generally located in the best malls (the company’s X-rated reputation was such that some high-end malls refused Frederick’s entry). Even the flagship Hollywood store was hopelessly outdated, having received its most recent remodel in 1982, which is certainly not a moment any fashionista would care to be stuck in. The merchandise was downright bipolar, with a selection of racy-to-downright-sleazy stripper wear on the one hand, and a line of overly utilitarian, no-nonsense foundation wear on the other.

“The logo is a good illustration of what was going on here,” LoRe says. “We had at least three separate logos in use-one for the catalog, one for the stores and one for the Web site. The whole company was like that.”

Under Chapter 11, LoRe closed more than 20 stores and began to restructure the company, focusing on what was good and letting what wasn’t fall away. Only two executives had been with Frederick’s for more than three years. “I didn’t have to go in and fire people. The turnover was organic,” she says. Today, most of the senior staff is female, and the atmosphere in the office is fairly breathless with anticipation. Frederick’s is expected to emerge from Chapter 11 within the next few weeks, and LoRe is actively courting investors for the company’s big roll-out.

The new product line is retro-chic and racy, with corsets, bras and panties that look like something Nicole Kidman would have worn in “Moulin Rouge,” as well as more wearable items in satin, lace and cotton that are, if anything, even sexier. “We’re going back to our heritage,” LoRe says in her cinder-block-walled office above the flagship store. “So we redesigned everything with the brand’s history in mind. The new logo, for instance, still has the traditional star dotting the ‘i.’ ”

The logo was easy. Getting the corporate culture to gel was what took the longest. LoRe studied companies such as Coca-Cola and Chanel to get an idea of how a company with a strong brand can capitalize on the past while looking toward the future. She also looked at other companies that had successfully spruced up their image. “If you look at a company like Target, its successful re-branding effort didn’t happen overnight,” LoRe says. “They were working on that for years. But you can believe that every single person who works for that company knows exactly what the brand’s image is supposed to be. And now look at them.” A lot more of the work involved talking to customers. The marketing team conducted many focus groups. And as part of their regular routine, the entire executive staff now spends time selling lingerie in the stores, as well as quizzing customers on what they like and don’t like about proposed product lines.

LoRe whips out a series of old catalog covers to illustrate the changes she’s implemented. “See this one,” she says, holding up a cover of a busty model bending over in a leopard-print swimsuit. “The model is objectified here, it’s insulting. And this one-” Here the model is wearing a coat. “It looks like a JCPenney catalog. That one turned off our true customers.” Finally, she flips to a current cover, where a fresh-faced wench in a push-up bra is smiling sweetly through wind-swept hair. “See here, this is the new Frederick’s: sexy, approachable, fun.”

This identity is being test-marketed at the remodeled boutique in the Glendale Galleria, one of the first Frederick’s stores to get a face-lift. The shop has been given an upscale boudoir feel, with red velvet draperies, gold walls, leopard-print carpeting and the new streamlined logo embossed in rich wood panels. The tone is decidedly voluptuous and womanly, not campy. “Victoria’s Secret is pink,” LoRe explains during a tour, “and we’re red.” Indeed.

Look closely and you’ll see that the elegant shop still sells crotchless panties, nipple-baring bras and marabou-trimmed baby doll nighties-things you don’t get anywhere else in a typical shopping mall. LoRe is deliberately positioning the company to offer “alternative” lingerie, relative to Victoria’s Secret’s more mainstream offerings. She even gives the big V a grateful nod for blasting the lingerie market wide open.Retail analyst Jeff Klinefelter of U.S. Bancorp Piper Jaffray, who tracks Victoria’s Secret’s parent company, Limited Brands, for investors, thinks she’s wise to do so. He also thinks LoRe’s strategy and timing are on target. “All Victoria’s Secret did was demonstrate that you could have a specialty retailer in this segment,” he says. “The newcomers who have failed, like Cacique, didn’t have a strong brand, and that’s one thing Frederick’s has going for them: They’ve got incredible brand equity. As for there being room in the market, look at Abercrombie & Fitch or American Eagle. Even though the Gap was out there, look how well these specialty retailers have done.

Admittedly, LoRe and her staff still have a long way to go before they can consider themselves an undergarment superpower. After all, the first ad campaign for Frederick’s has been plastered on city buses, not TV screens. But the next time the company’s industrial engineers (just who did you think built bras?) come up with some fabulous new gravity-defying innovation, you might find yourself walking into a company store and buying it. And one thing’s for certain: It’ll be red.

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Hillary Johnson last wrote for the magazine about blue eye shadow.