Victoria’s Secret to go Private; Wexner to Step Down

Jamie Grill-Goodman
Editor in Chief
Jamie goodman
Dream Angels Push-up Bra & Cheeky Panty from the retailer's 2020 Valentine's Day assortment.

Victoria’s Secret, which once ruled the lingerie category, will go private in a deal that puts a value on the lingerie brand of $1.1 billion. Upon closing, Leslie Wexner will step down as CEO and chairman of the board of L Brands

Private equity firm Sycamore will purchase the majority (55%) stake the struggling Victoria’s Secret, including the Prink brand and Victoria’s Secret Beauty, for around $525 million. L Brands will retain a 45% stake in Victoria’s Secret.

The company intends to use the proceeds from the transaction, along with approximately $500 million in excess balance sheet cash, to reduce debt.

"We believe this structure will allow Bath & Body Works – which represents the vast majority of 2019 consolidated operating income – to continue to achieve strong growth and receive its appropriate market valuation,” said Wexner.

"We believe the separation of Victoria’s Secret Lingerie, Victoria’s Secret Beauty and PINK into a privately held company provides the best path to restoring these businesses to their historic levels of profitability and growth. Sycamore, which has deep experience in the retail industry and a superior track record of success, will bring a fresh perspective and greater focus to the business. We believe that, as a private company, Victoria’s Secret will be better able to focus on longer-term results. We are pleased that, by retaining a significant ownership stake, our shareholders will have the ability to meaningfully participate in the upside potential of these iconic brands."

While Wexner will step down when the deal is done, he will remain a member of the board as chairman emeritus.

Wexner, L Brands largest shareholder with a 16% stake, is the longest-serving CEO of an S&P 500 company. He opened The Limited, his first store, in 1963 and bought Victoria's Secret in 1982 for $1 million.

“Les Wexner is a retail legend who has built incredible brands that are household names around the globe,” said Allan Tessler, lead independent board director, L Brands. “His leadership through this transition exemplifies his commitment to further growth of Bath & Body Works and Victoria’s Secret and driving overall shareholder value.”

Nick Coe, the current CEO of Bath & Body Works, has been named vice chairman of Bath & Body Works Brand Strategy and New Ventures. In Coe’s new role, he will focus more intently on the strategic position of the business, the evolution of the brand, product development and new ventures/acquisitions. 

Andrew Meslow, currently COO of Bath & Body Works, has been promoted to CEO of Bath & Body Works. At the close of the transaction, Meslow will become CEO of L Brands and will join its board.

“For nearly nine years, Nick and Andrew have been a powerful combination, driving the Bath & Body Works brand to more than $5 billion in sales with best-in-class profitability,” Wexner said. “Management and the board have been engaged in thoughtful discussions over the past few years to develop a succession plan that leverages the unique partnership established by Nick and Andrew to advance the long-term, strategic direction of the brand. We are pleased to name Andrew as CEO of Bath & Body Works and have Nick step into this new, more focused role as the team propels the brand and business forward.”

“Andrew’s deep company knowledge, his retail and financial acumen and his unwavering commitment to doing the right thing for the customer, our business and our associates make him the ideal leader for the next chapter of Bath & Body Works,” Coe said. “Andrew and I have walked side by side on this journey, and I look forward to our continued collaboration in our new roles as the entire team remains committed to keeping this exceptional brand on a growth trajectory well into the future.”

Meslow, who joined L Brands in 2003, has 29 years of experience in the retail industry, the last 15 at Bath & Body Works.

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