Victoria’s Secret Plans to Go Private; Les Wexner to Step Down
Victoria’s Secret, the once powerful and successful lingerie brand, will go private, CNBC reported. The brand made a deal with private equity firm Sycamore Partners that shows how much its value has recently diminished. For $525 million, the firm will acquire a 55 percent share in Victoria’s Secret from its owner, L Brands, and L Brands founder, 82-year-old Les Wexner, will step down as its chairman and CEO. Wexner will remain on the board as chairman emeritus.
L Brands’ stock has dropped 10 percent in pre-market trading after the agreement was announced, CNBC reported, likely a sign the market wasn't thrilled about the deal, which puts a value on Victoria's Secret of $1.1 billion. L Brands will use the money from the deal, along with an additional $500 million in surplus balance sheet cash, to reduce its debt. The company will now focus on its Bath & Body Works brand, which has helped to prop up L Brands.
Total Retail's Take: Over the past few years, consumers have opted to shop at lingerie brands that are more inclusive, have comfortable products, and promote body positivity, like Aerie and ThirdLove. Victoria's Secret, a brand known for its supermodels and "fantasy" persona, has struggled to reinvent itself and adapt to this shift in consumer mind-set. The brand has also been called out for not being inclusive with its sizing. As recent as 2018, Victoria's Secret was defending its exclusive ways when Ed Razek, chief marketing officer of L Brands at the time, said Victoria's Secret shouldn't have plus-size models in its fashion shows because the brand is meant to promote an unattainable fantasy. Despite all this, Victoria's Secret is still the leading brand in the lingerie category, so maybe with new leadership it will be able to strengthen its position. However, I think millennials may have their minds made up about the brand and will see right through any attempt Victoria's Secret makes to become more inclusive if it's not genuine.
Ashley Chiaradio is the Senior Content Strategist at Total Retail. Ashley has been creating content for more than 7 years, and provides a unique insight in covering the retail industry having worked directly for retailers in the past. She’s passionate about profiling women leadership in the space.