Retail mogul Leslie Wexner will leave the helm of his conglomerate L Brands amid scrutiny of his past ties with Jeffrey Epstein, while the company sells his Victoria’s Secret lingerie brand.
Wexner, 82, will resign as CEO and president of L Brands, which he founded and led for decades, after private equity firm Sycamore Partners takes control of Victoria & # 39; s Secret in an agreement that values the chain of underwear at about $ 1.1 billion, the company announced. Thursday.
Sycamore will pay around $ 525 million for a 55 percent stake in Victoria’s Secret, which will become a separate private company with L Brands with the remaining 45 percent, according to a press release. That seems to be a great discount for a brand that registered more than $ 7 billion in net sales during fiscal year 2018 of L Brands.
Wexner will remain on the board of L Brands, but will eventually be replaced as CEO by Andrew Meslow, whom the company appointed as executive director of Bath & Body Works, the conglomerate's beauty retailer that will become an independent public company.
"Les Wexner is a legend of retail that has created incredible brands that are known names worldwide," said Allan Tessler, independent principal director of the board of directors of L Brands, in a statement. "His leadership through this transition exemplifies his commitment to further growth of Bath & Body Works and Victoria’s Secret and boosting overall shareholder value."
The news of the agreement caused L Brands shares to fall 11.3 percent to $ 21.81 in pre-market trading at 9:04 a.m.
For a long time, a dominant player in the global lingerie market, Victoria’s Secret has recently struggled with falling sales and accusations of inappropriate behavior towards her models that were detailed in a New York Times exhibition earlier this month. In January, reports emerged that L Brands was in talks to sell the brand to Sycamore, which had previously bought agitated retail outlets such as Talbots, Limited, Hot Topic and Nine West.
Wexner, the CEO with more years of service at an S&P 500 company, has also faced questions about his relationship with Epstein, the pedophile financier who died of suicide last August awaiting trial on sex trafficking charges.
Wexner said he is "embarrassed" by his connections with Epstein and accused him of embezzling over $ 46 million while serving as Wexner's money manager.
Victoria’s Secret posted more than $ 1.4 billion in total sales for the quarter ending in early November. That amount accounted for more than half of the sales of approximately $ 2.6 billion of L Brands for the quarter, but marked a 7.6 percent decrease from the comparable period of the previous year.
In contrast, Bath & Body Works saw sales increase in that quarter to approximately $ 1 billion from approximately $ 956 million the previous year. The combined international sales of Victoria’s Secret and Bath & Body Works were approximately flat at approximately $ 133 million.