Retail tycoon Leslie Wexner will leave the helm of his L Brands conglomerate amid scrutiny of his past ties to Jeffrey Epstein, as the company sells off its struggling Victoria’s Secret lingerie brand.
Wexner, 82, will step down as CEO and chairman of L Brands, which he founded and has led for decades, after private equity firm Sycamore Partners takes control of Victoria’s Secret in a deal valuing the underwear chain at about $1.1 billion, the company announced Thursday.
Sycamore will pay about $525 million for a 55 percent stake in Victoria’s Secret, which will become a separate privately held company with L Brands holding the remaining 45 percent, according to a news release. That appears to be a steep discount for a brand that posted more than $7 billion in net sales during L Brands’s 2018 fiscal year.
Wexner will remain on the L Brands board but will eventually be replaced as CEO by Andrew Meslow, whom the company named chief executive of Bath & Body Works, the conglomerate’s beauty retailer that will become a standalone public company.
“Les Wexner is a retail legend who has built incredible brands that are household names around the globe,” Allan Tessler, L Brands’s lead independent board director, said in a statement. “His leadership through this transition exemplifies his commitment to further growth of Bath & Body Works and Victoria’s Secret and driving overall shareholder value.”
News of the deal sent L Brands shares down 11.3 percent to $21.81 in premarket trading as of 9:04 a.m.
Long a dominant player in the global lingerie market, Victoria’s Secret has recently wrestled with falling sales and allegations of inappropriate behavior toward its models that were detailed in a New York Times exposé earlier this month. Reports emerged in January that L Brands was in talks to sell the brand to Sycamore, which has previously snapped up flailing retail outfits such as Talbots, Limited, Hot Topic and Nine West.
Wexner — the longest-serving CEO of an S&P 500 company — has also faced questions about his relationship with Epstein, the pedophile financier who died by suicide last August awaiting trial on sex-trafficking charges.
Wexner has said he’s “embarrassed” about his connections to Epstein and has accused him of misappropriating more than $46 million while serving as Wexner’s money manager.
Victoria’s Secret recorded more than $1.4 billion in total sales for the quarter that ended in early November. That amount accounted for more than half L Brands’s roughly $2.6 billion in sales for the quarter but marked a 7.6 percent decrease from the comparable period in the prior year.
By contrast, Bath & Body Works saw sales rise in that quarter to about $1 billion from roughly $956 million the year before. Combined international sales for Victoria’s Secret and Bath & Body Works were roughly flat at about $133 million.
https://news.google.com/__i/rss/rd/articles/CBMibWh0dHBzOi8vbnlwb3N0LmNvbS8yMDIwLzAyLzIwL2wtYnJhbmRzLWJvc3MtbGVzbGllLXdleG5lci10by1zdGVwLWRvd24tYXMtY29tcGFueS1zZWxscy1vZmYtdmljdG9yaWFzLXNlY3JldC_SAXFodHRwczovL255cG9zdC5jb20vMjAyMC8wMi8yMC9sLWJyYW5kcy1ib3NzLWxlc2xpZS13ZXhuZXItdG8tc3RlcC1kb3duLWFzLWNvbXBhbnktc2VsbHMtb2ZmLXZpY3Rvcmlhcy1zZWNyZXQvYW1wLw?oc=5
2020-02-20 14:08:00Z
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