Victoria’s Secret Goes Private – And Wexner Steps Down – As L Brands Looks To Revitalize Itself
Topline: L Brands CEO and billionaire Leslie Wexner ended his 57-year run Thursday, with the Wall Street Journal reporting that Victoria’s Secret will go private amid tumbling share prices and ongoing scrutiny of Wexner’s past ties to disgraced financier Jeffrey Epstein.
- Sycamore Partners bought a 55% stake in Victoria’s Secret for $525 million from Wexner, and will take the lingerie company private according to the WSJ, which first reported the development.
- L Brands will keep a 45% stake in the separate company, and will continue to operate just one brand: Bath & Body Works, which will remain public.
- Wexner is expected to relinquish his CEO and chairman titles and will have a board seat for both companies, while maintaining his 17% stake in L Brands.
- It was reported January 29 that L Brands was exploring a sale and for Wexner to step down, which rallied share prices; as of Thursday, shares declined 12% in premarket trading.
- Also contributing to L Brands troubles were Wexner’s past ties to disgraced financier Jeffrey Epstein, a relationship Wexner said he regretted.
After the deal closes, Bath & Body Works COO Andrew Meslow will become L Brands’ new chief executive.
Crucial quote: “We believe the separation of [Victoria’s Secret] into a privately held company provides the best path to restoring these businesses to their historic levels of profitability and growth,” said Wexner in an L Brands press release.
Big number: 27%. That’s how much L Brands stock price dropped last year, despite the overall market rallying, according to the WSJ. And, as of Thursday, comparable sales at Victoria’s Secret declined 10% in Q4, while Bath & Body’s rose 10% during the same period of time.
Key background: Wexner, 82, acquired Victoria’s Secret in 1982. L Brands once counted The Limited and Abercrombie & Fitch among its holdings, and at its height was valued at $29 billion. He has the distinction of being the longest serving CEO of an S&P 500 company. Victoria’s Secret was known for its provocative marketing and its marquee fashion show, which was canceled last year as L Brands struggled with changing consumer tastes and ongoing fallout around Epstein. On August 10—three days before Epstein died by suicide in a Manhattan jail while awaiting trial for federal sex trafficking charges—Wexner said the disgraced financier had “misappropriated vast sums of money” from him and his family. Before that, L Brands hired an outside firm in July 2019 to investigate Epstein’s role with the company, and the results have not yet been released.
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