L Brands chief executive Leslie Wexner in talks to step down
Leslie Wexner, the billionaire behind Victoria’s Secret owner L Brands, was in talks to give up his role as chief executive while the retail company weighs a potential sale of the lingerie brand, said people briefed about the matter.
The board of L Brands has been considering options ranging from breaking up its retail empire to selling just Victoria’s Secret, in an effort to revive the fortunes of the troubled group which has suffered from falling sales.
Potential acquirers have expressed concerns about the company’s reputation due to Mr Wexner’s close association with the late financier and sex offender Jeffrey Epstein, who committed suicide last year while awaiting trial on charges of sex trafficking underage girls. Two of the people briefed added that Mr Wexner’s departure would help improve the company’s image and ease the sale of assets.
Mr Wexner, who for decades was Epstein’s only known client, has expressed regret over his business dealings with the late financier and accused him of misappropriating large sums of money in a letter to members of the Wexner Foundation where Epstein served as a trustee.
L Brands declined to comment on Wednesday about potential management changes and strategic review, which were first reported by the Wall Street Journal.
Last year L Brands became the target of activist hedge fund Barington Capital which pushed for the chairman and chief executive roles, both held by Mr Wexner, to be split and for the company to consider selling Victoria’s Secret or a public offering of its Bath & Body Works unit.
In a letter to Mr Wexner in March, Barington called the Victoria’s Secret brand “tone deaf” for failing to address “women’s evolving attitudes towards beauty, diversity and inclusion”. The New York-based fund also called for a board shake-up to increase diversity and add independent directors who did not have a close relationship with the 82-year-old billionaire.
Should he step back Mr Wexner would be handing over the reins at a difficult time for the group. Shares in L Brands fell as much as 40 per cent after the extent of his business dealings with Epstein came to light. The shares rose 12.5 per cent to $23.13 on Wednesday following news reports that he may step aside.
However, several analysts covering the retail sector have expressed their doubts over the likelihood of a sale.
“The company appears open to a range of possibilities,” said Oliver Chen, an analyst with Cowen. “However . . . deal financing and/or appetite for the Victoria’s Secret asset are potential constraints against an imminent deal taking place.”
A retail-focused banker who was not directly involved in the strategic review process said that the most likely buyer of any L Brands assets would be a private equity group with experience in turning round struggling retail chains.