After a period of falling shares and social relevance, Victoria's Secret is being sold. L Brands
Sycamore will be purchasing L Brand's 55% stake in the lingerie brand in a deal that values Victoria Secret's at $1.1 billion. Bath and Body Works, Victoria's Secret's sister brand, will function as a standalone company.
Wexner founded L Brands in the early '60s making him the longest serving CEO of any Fortune 500 company. Wexner is to be replaced by current COO of Bath and Body Works, Andrew Meslow, but he will remain on the board of directors as chairman emeritus.
Despite being the largest lingerie retailer in the U.S., Victoria's Secret sales have been falling in the last few years due to offensive remarks made by top officials with L Brands and an inability to keep up with their consumers' preferences in the #Metoo area.
"Indeed, we would go so far to say that its overt sexuality, its focus on airbrushed glamour, and its dark and moody stores are completely out of step with the mood of most modern consumers," Neil Saunders, the managing director for GlobalData Retail, said in late 2018.
One of the earliest signs of Victoria's Secret's problems to come was an interview with Vogue that Ed Razek, L Brands' chief marketing officer, did in 2018. He said including more diversity in runway shows would be seen as "pandering" because it wouldn't fit Victoria Secret's "brand". Commenting on the Savage [x Fenty] shows that were applauded for their diversity he said, "We watch this, we're amused by it, but we don't milk it."
"Do I think about diversity? Yes. Does the brand think about diversity? Yes. Do we offer larger sizes? Yes... It's like, why doesn't your show do this? Shouldn't you have transsexuals in the show? No. No, I don't think we should. Well, why not? Because the show is a fantasy. It's a 42-minute entertainment special. That's what it is," Razek told Vogue.
The interview resulted in falling stock prices for L Brands and decisive action by Victoria Secret's competitors who quickly denounced Razek's comments. Razek stepped down in August of 2018.
L Brands came under more scrutiny in 2019 when it came to light that Jeffery Epstein, then accused of child sex trafficking and abuse, had previously managed Les Wexner's finances.
"At some point in your life we are all betrayed by friends," Wexner said. "Being taken advantage of by someone who was so sick, so cunning, so depraved, is something that I'm embarrassed I was even close to. But that is in the past."
Wexner and Epstien met in 1980, and Wexner soon became one of Epstein's only clients. In the early 2000s Epstein commissioned a painting of Wexner's wife and children for over $325,000. That painting actually led to a lawsuit between Epstein and the painter during which it was established that Epstein and Wexner were "close personal friends".
When the painting was delivered to the Wexners, Mrs. Wexner was unhappy with the positions and ages of the children as well as her own expression in the painting. The suit surrounded whether or not Epstein had to pay for the painting and how much he would be required to pay. In the end, the suit was settled "amicably" according to the painter.
Over the course of their friendship, Wexner gave Epstein a Manhattan mansion, a private plane, a luxury estate in Ohio, and the power of attorney over all his legal and financial matters. To be clear, Wexner has repeatedly condemned the actions Epstein was accused of before his death.
Towards the end of his career, Wexner "didn't come round if the business was strong and we were getting great results", according to a former Victoria's Secret executive. However, when the company's longtime CEO Sharen Jester Turney stepped down in 2016, Wexner filled in as interim CEO. Seeing Wexner at meetings became a common occurrence.
"People would leave there in tears," a former employee who worked at Victoria's Secret for well over a decade in Wexner's hometown of Columbus, Ohio told Business Insider.
"He would often say things like, 'I am the only one in this room who really understands what women want," the former executive said. She said Wexner often relied on the input of Ed Razekwho he said "knows sexy, so he will tell me if it's sexy."