- Victoria’s Secret-owner L Brands surged as much as 16% in early Wednesday trading after The Wall Street Journal reported owner Les Wexner is in discussions to step down as CEO and sell the lingerie giant.
- The talks are reportedly ongoing, and could involve the full or partial sale of the brand, or end without any deal, sources familiar with the matter told The Journal.
- The report arrives amid analyst pressure to revamp the ailing lingerie business and reverse a years-long trend of slowing sales and dwindling market share.
- L Brands’ stock tanked 29% in 2019 despite nearly all other assets gaining value through the year.
- Watch L Brands trade live here.
Shares of Victoria’s Secret-owner L Brands spiked as much as 16% in early Wednesday trading after The Wall Street Journal reported owner Les Wexner is in talks to step down as CEO and sell the lingerie brand.
The discussions are reportedly ongoing and could involve the sale of the full brand or a part of it. L Brands is aiming to reach a final decision within the next few weeks, sources familiar with the matter told The Journal, but there’s no guarantee the talks will end in a deal.
The early Wednesday jump follows a dismal year for the company’s shares. L Brands sank 29% in 2019 as nearly all other assets gained value with the soaring bull market. The company’s market cap sits at about $US5.7 billion, down from its 2015 peak of $US29 billion.
The news of Wexner’s potential departure and a sale of the business comes amid analyst pressure to modernise the business and reanimate the gradually slumping stock. Victoria’s Secret stands as one of the biggest players in the lingerie sector, but its dominance has recently been threatened by smaller brands and their focus on inclusivity and comfort. The brand has been accused of oversexualizing its ads, and its runway shows lost their glamour in the wake of the #MeToo movement.
The company faced a new kind of scrutiny in the summer of 2019 when ties between Wexner and Jeffrey Epstein were publicized. The late financier and convicted sex offender previously managed the CEO’s funds, and the two were reportedly close friends.
Wexner, 82 years old, addressed his ties to Epstein in a September investor meeting, saying he was unaware of Epstein’s behaviour and that their friendship ended more than a decade ago.
“Being taken advantage of by someone who was so sick, so cunning, so depraved, is something that I’m embarrassed I was even close to. But that is in the past,” Wexner said.
L Brands’ board of directors hired an independent law firm to review the company’s connection with Epstein, though the investigation’s findings aren’t yet public.
Should he step down, L Brands’ CEO would end a 57-year reign but continue in his position as chairman, according to The Journal. Wexner founded the company in 1963 and is the longest-serving chief executive of an S&P 500 company.
L Brands closed at $US20.56 per share on Tuesday, up about 14% year-to-date.
The company has nine “buy” ratings, 16 “hold” ratings, and three “sell” ratings from analysts, with a consensus price target of $US21.78, according to Bloomberg data.
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