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.

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.