Victoria’s Secret has a new owner. Following months of scandal and years of falling sales, due in part to its struggles at the hands of newer, more modern competitors, the lingerie giant’s owner L Brands confirmed rumblings of a deal on Thursday, saying that private-equity firm Sycamore Partners will buy 55 percent of Victoria’s Secret for about $525 million, while L Brands – which had reportedly be looking to rid itself of control over the ailing brand – will hold on to the remaining 45 percent. The deal values the 43-year old lingerie company at $1.1 billion.
Columbus, Ohio-based L Brands “will now focus on running its Bath & Body Works stores as a separate company,” CNBC reports, which has fared remarkably well in a troubled market for over-extended brick-and-mortar retailers. The group also confirmed that its longtime chairman and CEO Leslie Wexner – who “built Abercrombie & Fitch, The Limited and Victoria’s Secret into national chains” under the umbrella of L Brands, which he founded in 1963 – will step down from his role at publicly-traded L Brands.
Wexner’s departure is something of an overdue move given that the 82-year old’s name has consistently made headlines over the past several months due to his significant and long-lasting business ties to late financier and convicted pedophile Jeffrey Epstein, and as recently as late last year, his name came up more than once in the rival defamation lawsuits that litigator David Boies and fellow lawyer and emeritus Harvard professor Alan Dershowitz lodged against one another in connection with Epstein.
The news of Wexner’s connections to Epstein – which sent L Brands’ stock price down 10 percent to around $25 as in mid-July, nearly “the lowest it’s been since 2010” – put a dark cloud over an already-struggling American retail empire. By the fall, L Brands revealed that Victoria’s Secret had cut about 50 people, “ranging from senior leaders to junior staffers, at its Columbus, Ohio, headquarters,” layoffs that represented about 15 percent of Victoria’s Secret’s employees at the brand’s home office.
In a statement in October, L Brands said that the job cuts and related “organizational changes” would help the company to “simplify the business [and] be more agile” in furtherance of “the evolution of our brand.” A month later, L Brands’ Q3 report revealed that Victoria’s Secret losing spree was still very much intact.
While Wexner boasted about “the endless possibilities ahead” for L Brands and Victoria’s Secret in a statement released on Thursday, in reality, the Victoria’s Secret deal “marks a sharp fall for a business that operates hundreds of stores, elevated the profiles of supermodels like Tyra Banks and Gisele Bündchen, and generated about $7 billion in annual sales in its last fiscal year,” the Wall Street Journal reported this week. Founded in San Francisco in 1977 by businessman Roy Raymond, and his wife, Gaye Raymond, and ultimately sold to Wexner in the early 1980s, Victoria’s Secret rapidly expanded its retail footprint in the U.S. and rose to sweep the market share of department stores and fellow undergarments makers, alike.
In recent years, however, the opposite has been true, as Victoria’s Secret – long known for its male gaze-centric marketing of supermodel “Angels” and pushup bras, and of course – has been falling out of favor. Viewership statistics for its annual televised runway show plummeted, prompting the company to pull the plug as of 2019. Meanwhile, its sales “have tumbled for three straight years,” per CNBC, weighing on its parent company’s valuation, which reached $29 billion at its peak in 2015.
As for the workings of Victoria’s Secret, the company has been the subject of a number of allegations centering on the toxic work environment, retaliation, and harassment. As reported by the Associated Press, “L Brands’ chief marketing officer Ed Razek resigned last August after making controversial comments about why transsexuals shouldn’t be models at its annual fashion show.” Since then, the New York Times has published more than one lengthy exposé
about how company executives fostered a “culture entrenched in misogyny, bullying and harassment.” Razek, for one, denied the allegations, claiming that they are “categorically untrue, misconstrued or taken out of context.”