Victoria’s Secret Has a New Owner, Wexner to Exit

Victoria’s Secret Has a New Owner, Wexner to Exit

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. Sycamore, which has deep experience in the retail industry and a superior track record of success, will bring a fresh perspective and greater focus to the business. We believe that, as a private company, Victoria’s Secret will be better able to focus on longer-term results. We are pleased that, by retaining a significant ownership stake, our shareholders will have the ability to meaningfully participate in the upside potential of these iconic brands.”’ data-reactid=”23″>Wexner continued, “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. Sycamore, which has deep experience in the retail industry and a superior track record of success, will bring a fresh perspective and greater focus to the business. We believe that, as a private company, Victoria’s Secret will be better able to focus on longer-term results. We are pleased that, by retaining a significant ownership stake, our shareholders will have the ability to meaningfully participate in the upside potential of these iconic brands.”

Sales have been declining at Victoria’s Secret since 2017 and selling the business was perhaps the quickest way to curb losses. ‘ data-reactid=”26″>But offloading Victoria’s Secret from L Brands, which also includes Bath & Body Works and Pink in the greater portfolio, seemed imminent. Sales have been declining at Victoria’s Secret since 2017 and selling the business was perhaps the quickest way to curb losses. 

Bras. ‘ data-reactid=”36″>“It’s difficult, because I go to the stores now and I’ve seen this move to, you know, the quality of the fabrics there is not great,” added Kaylin, who recently founded her own intimates brand, MINDD Bras. 

swimwear on the web site, selling smaller intimates brand La Senza and closing Henri Bendel, canceling the annual fashion show and even hiring Victoria’s Secret first plus-size model. ‘ data-reactid=”38″>In fact, the company has employed a number of tricks over the last year to reduce losses and perhaps regain customers — such as re-introducing swimwear on the web site, selling smaller intimates brand La Senza and closing Henri Bendel, canceling the annual fashion show and even hiring Victoria’s Secret first plus-size model. 

apparel, both in the U.S. and internationally — 24 percent of the U.S. market in 2018, down from 32 percent three years earlier, according to market research firm Euromonitor International. Victoria’s Secret alone had more than $7.3 billion in revenues for the 12 months ending in February 2019. That’s in addition to L Brands other lucrative businesses.’ data-reactid=”40″>Even so, Victoria’s Secret is still the market share leader in women’s intimate apparel, both in the U.S. and internationally — 24 percent of the U.S. market in 2018, down from 32 percent three years earlier, according to market research firm Euromonitor International. Victoria’s Secret alone had more than $7.3 billion in revenues for the 12 months ending in February 2019. That’s in addition to L Brands other lucrative businesses.

“Victoria’s Secret is still a valuable brand,” said Howard Meitiner, managing director at Carl Marks Advisors. “One should not write off a brand like this. When you own 24 percent of a market, you’ve got the base there to rebuild. They have the opportunity to re-introduce themselves to this whole sector of the market because they’re known. And they have the revenue to invest.” 

Even so, many argue that it is going to take a new pair of eyes — among many other changes — to turn things around. 

“Change and disruption are much more difficult to achieve from within,” Meitiner said. “It’s much more difficult for people within the company to reimagine the concept, because you have people within these companies who were authors of the construct that [currently] exists. It’s much more difficult to be self-critical than it is for new owners to come in and take a fresh look and give management an unencumbered view of how the company needs to change relative to the competition.”

He added that the transformation is going to have to be significant. “They’re not going to be able to get where they need to get incrementally,” Meitiner said. “They have to start with a whole new revisioning. It isn’t easy, which is why they need help. And it’s not going to be done overnight.”

Those changes include reexamining the cost structure, reevaluating the store fleet, updating the merchandise assortment and fixing the marketing and branding of the company’s image. Victoria’s Secret could also work with celebrities or well-known influencers to gain new followers. “It’s too late to have one with Beyonce or Rihanna,” Meitiner said. “But why wouldn’t they do other strategic partnerships?

“The thing about turnarounds in general is that when you’re trying to do a revisioning of a company or a transformation it is an organization-wide effort,” Meitiner continued. “It’s not just a c-suite thing. It’s every part of the business.”

In the meantime, Wall Street has also been growing increasingly impatient with turnaround plans that are taking longer than originally anticipated. 

Shares of L Brands are down more than 9 percent year-over-year — or down nearly 75 percent since the company’s peak in October 2015. 

The new owners then have their work cut out for them — and it’s something that might best be done out of the glare of the public eye. Johnson pointed out that going private allows Victoria’s Secret to restructure without investors and competitors watching. 

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