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Inside ThirdLove, the Online-Only Bra Powerhouse
By: Forbes
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In December 2011, Heidi Zak was shopping for a bra to go with her dress for the holiday party at Google, where she worked at the time. She wound up at Victoria’s Secret, the lingerie retailer that has long dominated the $12 billion industry, and bought an ill-fitting bra. “I took the pink bag and shoved it in my black backpack because I was embarrassed to carry it,” recalls Zak, a diminutive five-foot-four woman who is now 39.

Zak wanted something that fit her body better than angel brassieres, and she believed millions of other women would, too. So instead of returning the hated bra, the determined triathlete decided to pursue an idea she’d begun mulling for some time and make her own bras, using data to create a better fit. “I thought, ‘Why is it that bras are so uncomfortable and haven’t changed at all?’” she says.

From that basic idea, Zak and her co-founder husband, David Spector, have built five-year-old San Francisco-based ThirdLove into an online-only bra powerhouse with $160 million in expected sales this year, Forbes estimates. Zak isn’t the only one who sensed opportunity as Victoria’s Secret, with 29% market share, has been ailing, and younger women have shifted their buying online. ThirdLove’s big difference from the other upstarts, including True & Co., also based in San Francisco, and Adore Me, based in New York City, is its use of voluminous amounts of data—600 million data points such as breast shape, cup fit and band tightness from over 11 million women that it has culled from an online questionnaire—to create better-fitting bras, especially by pioneering the use of half-sizes. With $30 million in venture capital from investors that include L Catterton and New Enterprise Associates and an estimated valuation that sources peg at $750 million, ThirdLove earned a spot on Forbes’ annual Next Billion-Dollar Startups list. Zak and Spector combined are the largest shareholders in the business.

“They [are] going after a customer that Victoria’s Secret wasn’t,” says Lori Greeley, the former CEO of Victoria’s Secret who is now a ThirdLove investor and board member. “As Victoria’s Secret continued to put so much of their focus on the teenage college student, you could see that there were women who were looking for somewhere to graduate to.” 

Zak and Spector met in a karaoke bar in 2005 while they were both pursuing M.B.A.s at MIT’s Sloan School of Management. After graduation they moved to New York City, where Zak served as a director of international business for the retailer Aeropostale and Spector worked on Google Checkout, an early online payment-processing service. When Spector was hired by top VC firm Sequoia Capital, the pair relocated to San Francisco and Zak took a job at Google, where she worked in B2B marketing.

Over Thanksgiving weekend in 2011, the ultra-fit couple hiked to Mt. Everest's base camp, a ten-day journey. Climbing for eight hours a day, they talked about bras and a possible business they might build around them. The fateful visit to Victoria’s Secret a month later, Zak says, was “the straw that broke the camel’s back.” With one study showing women own 16 bras at any one time and buy four a year, they knew there was an opportunity if they could get the fit and brand right. They would price their offerings at an average of $68 to appeal to professional women who were turned off by Victoria’s Secret, despite its lower, $40-to-$60 price point, yet were unwilling to shell out $200 for a high-end brand like La Perla. That pricing is similar to that of brands sold at department stores, such as Natori or Chantelle.


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This article originally appeared on Forbes.com. You'll find a link to the original after the post. www.forbes.com
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