L Brands Announces Major Changes, Wexner Stepping Down
After weeks of rumors that Columbus-based L Brands would sell Victoria’s Secret and Leslie Wexner resign as Chairman and CEO, the company has officially announced its plan of action.
L Brands will separate its two remaining brands. Bath & Body Works will become a standalone public company, while Victoria’s Secret – comprised of Victoria’s Secret Lingerie, Victoria’s Secret Beauty and PINK – will be acquired by private equity firm Sycamore Partners.
The New York-based firm will purchase a 55% interest in Victoria’s Secret for $525 million. (The brand is currently valued at $1.1 billion.) L Brands will retain the remaining 45% minority stake in the flagship brand.
“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,” said Wexner in a press release. “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.”
Earnings results from the fourth quarter, which will be publicly announced on February 27, are expected to show growth for Bath & Body Works, with sales up 10%, while Victoria’s Secret continues to struggle with 10% decline in sales. In recently weeks, the lingerie brand has also come under scrutiny for a reported culture of misogyny with over 100 models penning a letter to CEO John Mehas urging him to make changes.
When the transaction closes, Wexner will be stepping down as CEO and Chairman of L Brands, but remain a member of the Board as Chairman Emeritus. Current Bath & Body Works COO Andrew Meslow will fill Wexner’s shoes. Meslow first will transition to CEO of the brand, then at Wexner’s departure, rise to Chief Executive Officer of L Brands and join the Board.
Current Bath & Body Works CEO Nick Coe will take on a new position as Vice Chairman of Bath & Body Works Brand Strategy and New Ventures, which will focus on the strategic position of the business, product development and new ventures/acquisitions.
Wexner has come under his own fire for close connections with disgraced financier and indicted sex trafficker Jeffrey Epstein. According to an ABC News report, Epstein acted as Wexner’s personal financial advisor for more than 15 years before the two apparently cut ties in 2007 following Esptein’s misappropriation of millions of Wexner’s money.
For more information, visit www.lb.com.