- Les Wexner is stepping down as CEO and chairman of L Brands after nearly six decades at the helm of the company.
- The company is selling a 55% stake in Victoria’s Secret to Sycamore Partners. L Brands will retain a 45% stake in the brand.
- L Brands-owned Bath & Body Works will become a standalone company.
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L Brands is selling a majority stake in Victoria’s Secret as its longtime CEO and chairman Les Wexner steps down from the company after nearly six decades at the helm.
L Brands announced Thursday that private equity firm Sycamore Partners will acquire a 55% stake in the Victoria’s Secret brand in a deal that values the company at $1.1 billion. L Brands will retain a 45% stake in the company, it said.
In addition, its sister brand, Bath & Body Works, will be run as a standalone company.
Les Wexner founded what is now L Brands in 1963 and is the longest-standing CEO of any Fortune 500 company. Wexner will step down from his role but stay on the board of directors as chairman emeritus.
Andrew Meslow, currently COO of Bath & Body Works, will take over as CEO of L Brands.
In a statement to the press Wexner said:
We believe the separation of Victoria's Secret Lingerie, Victoria's Secret Beauty and PINK into a privately held company provides the best path to restoring these businesses to their historic levels of profitability and growth. Sycamore, which has deep experience in the retail industry and a superior track record of success, will bring a fresh perspective and greater focus to the business. We believe that, as a private company, Victoria's Secret will be better able to focus on longer-term results. We are pleased that, by retaining a significant ownership stake, our shareholders will have the ability to meaningfully participate in the upside potential of these iconic brands.
The news of the Victoria's Secret sale comes after several years of declining sales and pressure from analysts and shareholders to address concerns over the business.
While Victoria's Secret is still the largest lingerie retailer in the US, its market share in the US has dropped in recent years and the brand has been accused of losing relevance among shoppers as its oversexualized ads and racy runway shows fail to resonate in the era of #MeToo.
This came to a head in November, after a Vogue interview with Ed Razek - chief marketing officer of Victoria's Secret parent company L Brands and one of its longest-standing executives after only Wexner himself - went viral online. Razek told the interviewer that he didn't think the company's annual fashion show should feature "transsexuals" because the show is a "fantasy."
"It's a 42-minute entertainment special. That's what it is," he said in the interview.
His comments sparked an outcry online, which later led to him issuing a formal apology. Razek later stepped down from the company in August.
Wexner's talks of departure come in light of scrutiny over his relationship with disgraced financier Jeffrey Epstein, who died by apparent suicide in federal prison in August while facing charges of sexual trafficking of minors.
In the summer of 2019, the company was caught up in the Jeffrey Epstein scandal. Epstein previously managed the money of L Brands CEO and founder Les Wexner and two were reportedly once close friends.
L Brands' board of directors hired an outside law firm to review its relationship with Epstein. In September, Wexner addressed his ties to Epstein at L Brands' investor meeting.
"At some point in your life we are all betrayed by friends," Wexner said. "Being taken advantage of by someone who was so sick, so cunning, so depraved, is something that I'm embarrassed I was even close to. But that is in the past."
If you are a Victoria's Secret employee and have a story to share, please contact this reporter via the encrypted messaging app Signal at +1 (646) 768-4716 using a non-work phone, by email [email protected], or by Twitter DM @MarySHanbury.
