// Victoria’s Secret now majority owned by Sycamore Brands after L Brands sells controlling stake
// Sycamore Brands will buy 55% of Victoria’s Secret for about $525m (£407 million), and L Brands will keep the remaining 45%
// L Brands has come under fire because CEO Les Wexner has ties to Jeffrey Epstein
Embattled lingerie brand and retailer Victoria’s Secret has had a change of hands, with its parent company selling its controlling stake to a private equity firm.
L Brands – which is best with uncomfortable questions about billionaire founder Lex Wexner who has run the company for five decades – has confirmed that Sycamore Brands will buy 55 per cent of Victoria’s Secret for about £525 million (£407 million).
The sale also means that Victoria’s Secret will effectively be taken private.
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L Brands will keep the remaining 45 per cent stake in the business, which has endured falling sales and a string of controversies in recent years.
Shares of L Brands dropped 14.6 per cent in pre-market trading on Thursday.
The selling price signifies a marked decline for a brand with hundreds of stores that booked about $7 billion (£5.4 billion) in revenue last year.
Amid increasing competition and changing consumer tastes, Victoria’s Secret suffered a 12 per cent drop in same-store sales during the most recent Christmas trading season.
It said same-store sales declined 10 per cent at Victoria’s Secret for the wider fourth quarter.
At its peak, the underwear and lingerie retailer was known for its catalogue filled with supermodels and a glitzy annual TV special that mixed fashion, models and music.
Amid its struggles, Victoria’s Secret sales have continued to erode, the show has been pulled from US network TV and its stock – which traded at close to $100 in 2015 – now trades at around $24.
L Brands has also come under scrutiny because Wexner has ties to the late financier Jeffrey Epstein, who was indicted on sex-trafficking charges.
Epstein started managing Wexner’s money in the late 1980s and helped straighten out the finances for a property development backed by Wexner in a wealthy suburb of Columbus, Ohio.
Wexner said he completely severed ties with Epstein nearly 12 years ago and accused him of misappropriating “vast sums” of his fortune.
Wexner also offered an apology at the opening address of L Brands’s annual investor day in Columbus last autumn, saying he was “embarrassed” by his former ties with Epstein.
Wexner will step down after the transaction with Sycamore Brands is completed and become chairman emeritus.
He the longest-serving chief executive of an S&P 500 company, the US answer to the FTSE 350 in the UK.
He also owns approximately 16.71 per cent of L Brands, according to FactSet.
Sycamore has about $10 billion (£7.7 billion) in assets under management, including retailers such as Belk, Coldwater Creek, Hot Topic and Talbots.
“We believe there is a significant opportunity to reinvigorate growth and improve the profitability of Victoria’s Secret,” Sycamore Brands managing director Stefan Kaluzny said.
“We look forward to partnering with the leadership team to pursue these objectives.”
with PA Wires
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