Victoria's Secret Owner Reportedly In Talks To Sell The Company

Billionaire Leslie Wexner is reportedly looking to step down as the chief executive officer of his company L Brands Inc. (NYSE: LB) and sell his stake in the subsidiary brand, the Victoria's Secret.

Benzinga · 01/30/2020 09:00

Billionaire Leslie Wexner is reportedly looking to step down as the chief executive officer of his company L Brands Inc. (NYSE: LB) and sell his stake in the subsidiary brand, the Victoria's Secret.

What Happened

L Brands is in talks with New York-based private equity firm Sycamore Partners for a partial or complete sale of Victoria's Secret brand, the Wall Street Journal reported Tuesday.

According to the Journal, Wexner, who has led the company for nearly six decades, could be stepping down because of the mounting pressure over the declining salse of his former close relations with now-deceased financier Jeffrey Epstein.

"We're not going to comment on such rumors," an L Brands spokeswoman told multiple news outlets who asked to confirm the report.

Why It Matters

Victoria's Secret, while continues to dominate the lingerie market in the United States, has failed to make the numbers in recent years, both as part of a larger struggle of all retailers to keep up in the times of e-commerce and changing consumer preferences.

The other L Brands subsidiary Bath & Body Works will remain with L Brands if this deal is finalized, the Journal noted.

L Brand's one-year returns are at -10.65%. While selling Victoria's Secret won't sell all of its problems, it could provide an avenue for Bath & Body Works' full potential to be unleashed, according to Jeffries analysts.

"Given that Bath & Body Works has remained one of the strongest concepts in the mall, while Victoria's Secret comps have decelerated further… separating the Victoria's Secret and Bath & Body Works businesses could be a possibility management should explore," the analysts said in a note, according to MarketWatch.

"Most notably, Victoria's Secret sale or a Bath & Body Works spinoff could unlock significant value given that L Brands shares do not appear to appropriately value Bath & Body Works outperformance."

Price Action

L Brands' stock closed 12.94% at $23.22 per share. It traded 0.9% lower in after-hours.

Photo Credit: Public domain photo via Wikimedia.