Victoria’s Secret to be Sold for $525 Million
Victoria’s Secret, the historic underwear brand founded by the American billionaire Leslie Wexner, recently overwhelmed by the me too scandal. Not only, in fact, the New York Times has brought to light a whole series of testimonies and complaints of sexual harassment concerning the company and also bring the helmsman of the Wexner group into play, but in general in 2020 Victoria’s Secret lingerie and his classic way of presenting it is perceived as no longer current. Suffice it to say that when she had not yet been overwhelmed by this internal me too, Victoria’s Secret had already decided not to let her famous “angels” on the catwalk anymore.
And it is also probably linked to this last consideration the earnings alarm launched by L Brands, a group listed on Wall Street which currently still controls the brand of sexy underwear, at the beginning of 2020, when the profit estimates for the fourth quarter of 2019 were cut to around $ 1.85 per share from the previous $ 2.
Were not enough, in the last note of February 20 which announces the passage of control of Victoria’s Secret, L Brands always anticipates for the last quarter of 2019 a drop in sales of the order of 2%, linked to the collapse of 10% the contribution of Victoria’s Secret and the 10% increase in the Bath & Body Works bubble bath division.
Numbers that probably help to understand why L Brands, whose majority stake belongs to Wexner, has decided to sell the 55% majority stake in Victoria’s Secret o stay at the 45 percent. To buy, based on a valuation of the company of 1.1 billion dollars, is the private equity fund Sycamore Partners, which for the controlling share will pay 525 million dollars.
After the transaction, Wexner will take a step back and will leave the chair of CEO and president to remain on the board of directors as president emeritus. Andrew Meslow will take his place as CEO.
“We believe that the separation of Victoria’s Secret into a company no longer listed on the stock exchange represents the best opportunity to bring businesses back to their historical levels of profitability and growth,” said Wexner perfectly aware of Victoria’s Secret’s budget problems. But there is the risk that to return to the glories of the past, when angels paraded on the catwalk, the entire brand would have to be rethought.
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Victoria’s Secret, which encompasses the Victoria’s Secret Beauty and PINK brands, will be able to “return to its historical levels of profitability and growth” in the long term thanks to the agreement with Sycamore, which has “great experience in the retail sector and a record of success” , the tycoon wrote in the note.
Wexner, who has been leading L Brands for half a century, has been splashed by controversy in recent months for his business relationship with the financier accused of sexual abuse of minors Jeffrey Epstein, who committed suicide last summer in his cell New York while waiting for a trial.
Victoria's Secret to be Sold for $525 Million - /10