A statement from the company’s owner, L Brands, elaborates that the company will keep a 45 percent stake in order to “enable its shareholders to meaningfully participate in the upside potential of these businesses.” Notice of the sale came shortly before Victoria’s Secret CEO Les Wexner sent an email to employees on Thursday morning to announce his stepping down after 60 years spent at the helm of one of the nation’s largest retail empires, reports Columbus Business First.
“As I’ve said before, retail is a business of change and we have seen our business evolve and take new paths many times before — always with a view to creating new possibilities for the future,” Wexner wrote. “Still, change is never entered into lightly, and the decision to take this action comes after thorough and thoughtful examination by our board of the opportunities available to drive long-term value for associates, partners and shareholders.”
His letter made no mention of the brand’s long-winded spiral, including a 12 percent drop in same-store sales during the recent holiday season, nor allegations of its “culture of misogyny and abuse.” Once the sale closes, Victoria’s Secret will become a private company, which Wexner says is essential to the brand’s survival.
“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,” Wexner is quoted as saying in the statement from L Brands.
The company’s selling price signifies a sharp decline for a brand which pulled in $7 billion in revenue last year and operates over 1,100 stores in the U.S., in addition to hundreds of international franchises. Victoria’s Secret stock, which traded at nearly $100 in 2015, trades at around $24 today.
Analysts attribute the decline to changing consumer tastes and increased competition from newcomers like Adore Me, ThirdLove, and Savage X Fenty Lingerie, the brand by pop star Rihanna, which feature body-positive messaging and advertising.
In late November of 2019, the brand announced it was canceling its renowned annual fashion show, which has aired since 2001, and featured high-profile music acts. L Brands CFO Stuart Burgdoerfer told analysts that the show itself had no immediate impact on sales, and that the company had chosen to cancel it in order to “evolve the marketing” of its signature lingerie brand, according to Variety.
L Brands, which also owns Bath & Body Works, will appoint Andrew Meslow, the current COO of Bath & Body Works, to take Wexner’s place as CEO of L Brands once the Victoria’s Secret deal closes.