L Brands Archives – CULTURE MIX

Victoria’s Secret acquisition deal with Sycamore Partners cancelled; L Brands will still spin off Victoria’s Secret as private company

May 4, 2020

by Daphne Sorenson

Models at the 2018 Victoria’s Secret Fashion Show (Photo by Jeff Neira/ABC)

In February 2020, Victoria’s Secret parent company L Brands (based in Columbus, Ohio) had announced that it sold a 55% stake in Victoria’s Secret to private equity firm Sycamore Partners, for a reported $525 million, but that deal has now been cancelled. According to fashion trade publication WWD, L Brands still plans to spin off Victoria’s Secret into a private company, while also doing the same for Bath & Body Works. As part of the restructuring, L Brands chairman/CEO Les Wexner stepped down from his position, after founding the company in 1963. In March 2020, it was announced that Sarah E. Nash is his replacement.

Victoria’s Secret and its Pink spinoff brand have been experiencing a sharp decline in sales in recent years. The coronavirus pandemic, which resulted in the temporary closures of numerous clothing retailers worldwide, worsened the fortunes of Victoria’s Secret. The $525 million price tag for Victoria’s Secret was far lower than the $7.6 billion that Victoria’s Secret was valued at in 2015. The brand’s sales peaked during the 2006-2016 CEO leadership of Sharen Jester Turney, who left the company in 2016. After the coronavirus pandemic, Victoria’s Secret value no doubt plummeted even lower than $525 million.

Even before the coronavirus pandemic, Victoria’s Secret was on a downward spiral. The year 2019 was turbulent for Victoria’s Secret and L Brands. In August 2019, more than 100 models and several of their allies (including Models Alliance and Times Up) signed an open letter to Victoria’s Secret CEO John Mehas to demand an end to the sexual abuse and sexual harassment that has allegedly been running rampant against Victoria’s Secret models.

The letter was published just two days after L Brands chief marketing officer Ed Razek publicly announced he was leaving the company. Wexner and Razek had close ties to convicted sex offender Jeffrey Epstein, who was arrested again in July 2019, for sex crimes, specifically, for sex trafficking of women and underage girls. Epstein was found dead in his jail cell at the Metropolitan Correctional Center in New York City on August 10, 2019. According to the Associated Press, he died of an apparent suicide by hanging.

Razek came under fire in 2018, when he said in a Vogue interview that Victoria’s Secret was not interested in hiring plus-sized or transgender models. In August 2019, Victoria’s Secret hired its first transgender model: Valentina Sampaio, who posted the news on her Instagram account. But that milestone was apparently too little, too late.

The open letter blasting Victoria’s Secret was among several blows to the company in 2019. The Victoria’s Secret Fashion Show was completely canceled only a few months after it was announced that the show would not be televised anymore.

In addition, about 15% of Victoria’s Secret employees (about 50 people) were laid off in October 2019, the same month that Victoria’s Secret head of stores and store operations April Holt stepped down from her position after 16 years working for the company.

Meanwhile, rival lingerie brands such as Aerie, ThirdLove, Adore Me and Lively have experienced an increase in sales in recent years. Many market analysts have noted that Victoria’s Secret alienated many customers by having only tall and thin models in its marketing, while newer brands embrace a more diverse variety of body sizes in their marketing and in their product selections. In addition, websites that track customer feedback for retailers have noted that there have been numerous complaints about the decreasing quality of Victoria’s Secret products and customer service.

Victoria’s Secret majority stake sold by L Brands to Sycamore Partners

February 20, 2020

by Daphne Sorenson

Models at the 2018 Victoria’s Secret Fashion Show (Photo by Heidi Gutman/ABC)

Victoria’s Secret parent company L Brands (based in Columbus, Ohio) has sold a 55% stake in Victoria’s Secret to private equity firm Sycamore Partners, for a reported $525 million. L Brands will keep the remaining 45% stake in Victoria’s Secret, which will revert back to being a private company. As part of the restructuring, L Brands chairman/CEO Les Wexner will step down from his position, after founding the company in 1963.

L Brands will continue to have full ownership of Bath & Body Works. According to the Associated Press: “Sycamore manages a $10 billion portfolio including such struggling retailers as Belk, Hot Topic and Talbots.”

Victoria’s Secret and its Pink spinoff brand have been experiencing a sharp decline in sales in recent years. The $525 million price tag is far lower than the $7.6 billion that Victoria’s Secret was valued at in 2015. The brand’s sales peaked during the 2006-2016 CEO leadership of Sharen Jester Turney, who left the company in 2016.

The sale comes after a turbulent 2019 for Victoria’s Secret and L Brands. In August 2019, more than 100 models and several of their allies (including Models Alliance and Times Up) signed an open letter to Victoria’s Secret CEO John Mehas to demand an end to the sexual abuse and sexual harassment that has allegedly been running rampant against Victoria’s Secret models.

Victoria’s Secret blasted by models, who sign open letter demanding protection from sexual misconduct in workplace

August 7, 2019

by Daphne Sorenson

Victoria’s Secret models backstage at the 2018 Victoria’s Secret Fashion Show. (Photo by Heidi Gutman/ABC)

More than 100 models and several of their allies (including Models Alliance and Times Up) have signed an open letter to Victoria’s Secret CEO John Mehas to demand an end to the sexual abuse and sexual harassment that has allegedly been running rampant against Victoria’s Secret models.

The letter reads, in part: “In the past few weeks, we have heard numerous allegations of sexual assault, alleged rape, and sex trafficking of models and aspiring models. While these allegations may not have been aimed at Victoria’s Secret directly, it is clear that your company has a crucial role to play in remedying the situation. From the headlines about L Brands CEO Leslie Wexner’s close friend and associate, Jeffrey Epstein, to the allegations of sexual misconduct by photographers Timur Emek, David Bellemere, and Greg Kadel, it is deeply disturbing that these men appear to have leveraged their working relationships with Victoria’s Secret to lure and abuse vulnerable girls.”

Most of the models who signed the open letter are not very well-known in the industry or are well-known models who are over the age of 30, such as Milla Jovovich, Emme, Doutzen Kroes, and Carolyn Murphy. Noticeably absent from the letter are supermodels who’ve been steadily employed by Victoria’s Secret in recent years, such as Gigi Hadid, Bella Hadid, Kendall Jenner, Behati Prinsloo, Jasmine Tookes, Barbara Palvin and Taylor Hill. Adriana Lima, who retired from Victoria’s Secret runway shows in 2018, was also not on the list of people who signed the letter.

L Brands (based in Columbus, Ohio) is the parent company of Victoria’s Secret. The letter was published just two days after L Brands chief marketing officer Ed Razek publicly announced he was leaving the company. Wexner and Razek had close ties to convicted sex offender Jeffrey Epstein, who was arrested again in July 2019, for sex crimes, specifically, for sex trafficking of women and underage girls.

The open letter blasting Victoria’s Secret is the latest blow to the company, which officially canceled the 2019 Victoria’s Secret Fashion Show only a few months after it was announced that the show would not be televised anymore. Victoria’s Secret and its Pink spinoff brand have also been experiencing a sharp decline in sales in recent years.

August 10, 2019 UPDATE: Convicted sex offender Jeffrey Epstein was found dead in his jail cell at the Metropolitan Correctional Center in New York City on August 10, 2019. According to the Associated Press, he died in the morning of an apparent suicide by hanging. The Associated Press also reports that although Epstein, who was 66, had been on suicide watch in the weeks leading up to his death, he was not on suicide watch at the time he was found dead. He had been denied bail while waiting to be put on trial on charges of sex-trafficking of underage girls. Of course, Epstein’s sudden death has fueled conspiracy theories that he might have been murdered to prevent him from exposing who his rich and powerful clients were in the sex crimes that Epstein was accused of committing.

Victoria’s Secret Fashion Show canceled for 2019

July 31, 2019

by Daphne Sorenson

Victoria’s Secret’s models at the 2018 Victoria’s Secret Fashion Show
(Photo by Jeff Neira/ABC)

The annual Victoria’s Secret Fashion Show has been canceled for 2019. At this point, it is unknown how long this hiatus will last or if the show will never come back. The news comes after the May 2019 announcement that the show was not going to be televised after ending its partnership with ABC.

Victoria’s Secret model Shanina Shaik told Australia’s Daily Telegraph: “Unfortunately, the Victoria’s Secret Show won’t be happening this year. It’s something I’m not used to because every year around this time I’m training like an Angel.”

Shaik was a Victoria’s Secret Angels model at the show in 2011, 2012, 2014, 2015 and 2018.

It’s the latest blow to Victoria’s Secret, which has been experiencing declining sales and store closures.

TV ratings for the annual Victoria’s Secret Fashion Show had also been on a rapid decline. The show, which debuted in 1995, wasn’t televised until 2001, when it got 12.4 million U.S. viewers on ABC. It remains the highest-rated Victoria’s Secret show for a single TV network, according to Nielsen. CBS televised the show in 2002, 2003 and from 2005 to 2017. During those years, the ratings ranged from 10.5 million U.S. viewers (in 2002) to 5 million U.S. viewers (in 2017). ABC picked up the show in 2018, when it had 3.3 million U.S viewers.

In addition, Victoria’s Secret (whose parent company is L Brands) has been losing goodwill due to widespread complaints over bad customer service, decreasing quality of products, and an outdated modeling image that pushes the idea that only very thin women can be “sexy.”

L Brands chief marketing officer Ed Razek came under fire when he admitted to Vogue in 2018 that Victoria’s Secret discriminates against plus-sized models and transgender models by excluding them from them campaigns and shows, because he said that these types of models don’t fit the Victoria’s Secret image. He stood firm in saying that Victoria’s Secret had no plans to change these hiring practices to include plus-sized or transgender models.

[August 5, 2019 UPDATE: Victoria’s Secret has hired its first transgender model: Valentina Sampaio, who posted the news on her Instagram account.]

In July 2019, L Brands chairman/CEO Les Wexler faced scrutiny when the New York Times revealed that from the early 1990s to 2007, he had close business and personal ties with convicted sex offender Jeffrey Epstein, who pleaded guilty in 2007 to hiring a prostitutes (underage and over the age of 18). Epstein was arrested again in July 2019 on charges of underage sex trafficking. According to the New York Times report, Wexler named Epstein a trustee of several of Wexler’s foundations, and he gave Epstein power of attorney over much of his financial assets for a number of years. Their business relationship ended in 2007.)

Epstein, who was also a close associate of Razek, used his position of influence to be a VIP guest at numerous Victoria’s Secret events in the 1990s and 2000s, according to the New York Times. So far, L Brands has not publicly commented on the New York Times’ reports of Epstein’s connections to at least two of the company’s senior-level executives.

August 8, 2019 UPDATE: Razek has resigned from L Brands. Meanwhile, Wexner has written a letter to one of his foundations stating that Epstein “misappropriated” at least $46 million from Wexner and his personal interests. Wexner did not allege that Epstein embezzled any funds from L Brands.

Victoria’s Secret Fashion Show canceled from television

May 10, 2019

by Daphne Sorenson

The annual Victoria’s Secret Fashion Show has been canceled—at least on television. According to the New York Times, L Brands (the company that owns Victoria’s Secret) announced in an internal memo on May 10, 2019, that the famous lingerie show featuring numerous supermodels will no longer be airing on television.

L Brands CEO Leslie Wexner said in the memo that the company had been “taking a fresh look at every aspect of our business” in the past few months, and noted that Victoria’s Secret “must evolve and change to grow … With that in mind, we have decided to re-think the traditional Victoria’s Secret Fashion Show. Going forward we don’t believe network television is the right fit.” He said the company would develop “a new kind of event” for Victoria’s Secret but did not elaborate on any further details.

It’s the latest blow to Victoria’s Secret, which has been experiencing declining sales and store closures.

TV ratings for the annual Victoria’s Secret Fashion Show have also been on a rapid decline. The show, which debuted in 1995, wasn’t televised until 2001, when it got 12.4 million U.S. viewers on ABC. It remains the highest-rated Victoria’s Secret show for a single TV network, according to Nielsen. CBS televised the show in 2002, 2003 and from 2005 to 2017. During those years, the ratings ranged from 10.5 million U.S. viewers (in 2002) to 5 million U.S. viewers (in 2017). ABC picked up the show in 2018, when it had 3.3 million U.S viewers.

It’s likely that the Victoria’s Secret Fashion show will continue and will have an online platform where people can watch the show.

Victoria’s Secret business crisis: store shutdowns, PINK brand in decline

April 1, 2019

by Daphne Sorenson

Models at the 2018 Victoria’s Secret Fashion show in New York City (Photo by Heidi Gutman/ABC)

Victoria’s Secret is experiencing a very public meltdown. The world’s most famous lingerie brand is closing up to 53 stores in North America in 2019, due to a decline in sales. According to Business Insider, most of the stores are located in shopping malls, which have been experiencing their own major financial problems in recent years. Although Victoria’s Secret has swimwear and sportswear, the company’s core business is still lingerie. In November 2018, Victoria’s Secret Lingerie appointed John Mehas its CEO. He replaced Jan Singer, who was with the company for two years.

Meanwhile, PINK—the Victoria’s Secret brand targeted to millennials—has become a big flop. Jefferies analyst Randal Konik told investors that sales for PINK in fell in the “low double digits” for the fourth quarter of 2018, according to Business Insider. Konik gave investors this bleak view of PINK after he attended a PINK consumer event at New Jersey’s Rutgers University on March 29, 2019: “Our visit to Rutgers University on 3/29 shows the PINK brand without fans and rudderless. We believe PINK sales may be cut in half or more within the next 12-24 months.”

It’s the latest financial problem for Victoria’s Secret parent company L Brands, which already experienced the shutdown of its Henri Bendel business in January 2019.

So why has Victoria’s Secret been losing so much business? In December 2018, Business Insider reported that it’s a combination of reasons, such as complaints about bad customer service, the declining quality of the clothes and the company’s alienating image that women are “sexy” only if they look like the thin women who are hired to be Victoria’s Secret models. It didn’t help that L Brands chief marketing officer Ed Razek told Vogue in 2018 that there were no plans for Victoria Secret to have plus-sized on transgender models, and that Victoria’s Secret was not going to add plus-sizes because L Brands already has retail brand Lane Bryant, whose specialty is plus-sized women’s clothing. (What he didn’t mention in the interview is that Lane Bryant is also experiencing financial difficulties and store closures.)

Simply put: In an era where consumers are demanding more inclusive representation, Victoria’s Secret has been increasingly perceived as old-fashioned, out-of-touch and over-priced.

Here’s a partial list of the Victoria’s Secret stores that are confirmed to close in 2019, according to Business Insider:

Astoria, New York: 31-35 Steinway Street
Clay, New York: Great Northern Mall, 4155 NY-31
Washington, DC: 1050 Connecticut Avenue NW
Reston, Virginia: Reston Town Center, 11929 Market, Suite 50
Richmond, Virginia: Stony Point Fashion Park, 9200 Stony Point Parkway
Glen Allen, Virginia: Virginia Center Commons, 10101 Brook Road
Myrtle Beach, South Carolina: Myrtle Beach Mall, 10177 N. Kings Highway
Knoxville, Tennessee: West Town Mall, 7600 Kingston Pike
Jacksonville, Florida: Regency Square Mall, 9501 Arlington Expressway
Cedar Falls, Iowa: College Square Mall, 1 College Square Mall
Akron, Ohio: Chapel Hill Mall, 2000 Brittain Road
Cincinnati, Ohio: Tri-County Mall, 11700 Princeton Pike
Cleveland, Ohio: Tower City Center, 230 W. Huron Road
Elyria, Ohio: Midway Mall, 3433 Midway Mall

Henri Bendel going out of business by January 2019

September 14, 2018

by Yvette Thomas

L Brands Inc.—the parent company of luxury retailer Henri Bendel and lingerie retailer Victoria’s Secret and beauty retailer Bath & Body Works—has announced that it is permanently shuttering Henri Bendel by January 2019. All 23 Henri Bendel stores, as well as Henri Bendel’s online business, will be closed. Employees have been given a choice to interview for other L Brands jobs or accept severance pay. Henri Bendel had been in business since 1895. The flagship Henri Bendel on Fifth Avenue in New York City opened in 1913.

According to Marketwatch, L Brands stock rose 5.58% after it was announced that Henri Bendel was going out of business. Marketwatch also reports: “Henri Bendel’s 2018 revenue to total $85 million and its operating losses to total $45 million. L Brands stock is down more than 52% for the year so far while the S&P 500 index SPX, +0.03% is up 8.6% for the period.”

L Brands reported $12.6 billion in revenue for 2017, so Henri Bendel’s shuttering represents a small fraction of the L Brands’ business. However, Victoria’s Secret has reportedly been struggling and is on industry watch lists as a retailer that could be in big trouble by the year 2020.

Henri Bendel is one of many fashion retailers that have been experiencing massive closures in 2018.