Sycamore Partners buys 55% stake in Victoria's Secret

Marco Green
February 25, 2020

Victoria's Secret's parent company has also sold a controlling stake in the brand, selling 55% of it for $525 million.

THE DETAILS L Brands will retain a 45 percent stake in the famous underwear brand and, upon closing, Leslie H Wexner will step down as Chairman and CEO in favor of a Chairman Emeritus role.

Wexner continued, "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".

Stacey Widlitz, president of SW Retail Advisors, a retail consultancy, said Victoria's Secret designs in the last few years were going in the opposite direction of what women wanted, ever sexier and poorer quality.

The management workforce at Victoria's Key primarily was creating what guys want, not what women of all ages want, said Neil Saunders, handling director of GlobalData Retail. Previously, L Brands counted The Limited, Lane Bryant, Henri Bendel, Abercrombie & Fitch, Express and more as part of its portfolio. "It should be about making women feel good about themselves".

"Victoria's Secret has emphasized too much on sex appeal and fashion". By the mid-1990s, Victoria's Secret lit up runways and later filled the internet with its supermodels and an annual television special that mixed fashion, beauty and music.

Its televised fashion show, which began in 2001, was cancelled a year ago as the number of viewers dwindled.

Victoria's Secret has been struggling over the years because it failed to adapt to consumer demand for more custom-fitted bras and inclusive messaging in its advertisements. Rivals like Adore Me and ThirdLove, which have sprouted up on line and marketed on their own closely on social media platforms like Instagram, have concentrated on fit and comfort though providing additional choices for various system varieties. In recent years, Victoria's Secret, once the quintessential lingerie brand, has faced decreasing sales and massive downturn in public perception.

After two straight years of declining sales, Victoria's Secret shuttered 53 of its 1,143 stories in 2019.

And while previous year Victoria's Secret started featuring more diverse models, including its first openly transgender model, the moves fell short.

But sales faltered from 2015 onwards as more body-positive brands like Aerie and Lively and athleisure brands like Lululemon attracted shoppers exhausted of Victoria's Secret's padded, push-up aesthetic. Bath & Body Works, which has been a bright spot, enjoyed a 10 percent increase. The skincare chain represents more than 80% of L Brands' running revenue.

"The (Victoria's Secret) brand has lost its way, while the lingerie market is not large or high growth, and has become commoditized", Konik wrote Thursday. "Furthermore, with athleisure taking over, the need for regular bras continues to wane".

The quintet also requested that General Randall Meyer, the Ohio Inspector, probe accusations that Abigail Wexner, who sits on OSU's board of trustees, allowed Epstein to sexually assault a younger girl at an Ohio property in the ownership of the Wexners.

The company's fashion show was cancelled last year, and shares of Victoria Secret's parent company have gone from triple digits less than five years ago to a quarter of that today. Epstein signed Wexner's tax returns, was allowed to borrow money on his behalf and over the years obtained a portfolio of properties including a mansion in Manhattan and a luxury estate in OH worth roughly $100m that had previously been owned by Wexner or his companies.

Mr Wexner offered an apology at the opening address of L Brands's annual investor day in Columbus last autumn, saying he was "embarrassed" by his former ties with Epstein.

Wexner's step down from the company came after public scrutiny over his ties to Jeffrey Epstein.

"They have a lot of work to do - within the company and also outside with the customers", Robbins said. A New York Times investigation found an entrenched culture of "misogyny, bullying and harassment" at the company in which "abuse was just laughed off and accepted as normal".

Other reports by Click Lancashire

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