Retail tycoon Leslie Wexner will leave the helm of his L Makes as the retail conglomerate sells off its struggling Victoria’s Secret chain.
The 82-calendar year-outdated billionaire — who, in addition to criticism of the lingerie giant’s supermodel-pushed marketing has weathered scrutiny of his past ties to Jeffrey Epstein — will phase down as CEO and chairman of L Models.
Wexner will move down following buyout business Sycamore Companions will take control of Victoria’s Mystery in a offer valuing the underwear chain at about $1.1 billion, the company announced Thursday.
Sycamore will spend about $525 million for a 55-per cent stake in Victoria’s Magic formula, which will turn into a different privately held corporation with L Brands keeping the remaining 45 percent, in accordance to a news release.
That appears to be a steep lower price for a brand that posted extra than $7 billion in net gross sales all through L Brands’ 2018 fiscal calendar year.
Whitney Tilson, founder of Empire Monetary Research, explained he thinks L Brand names botched the Victoria’s Key deal describing it as a “fire sale,” indicating Sycamore must have compensated at minimum double for the lingerie giant.
“The only rational rationalization I can arrive up with for selling this asset at this sort of a small price tag is that the enterprise is a lot even worse than people assume,” Tilson told The Put up.
Wexner has led the firm he established for 57 years — the longest-working CEO stint in the S&P 500. Next his exit, Warren Buffett will develop into the longest-tenured CEO in the S&P 500, possessing led Berkshire Hathaway for 50 several years.
Wexner will remain on the L Models board but will eventually be changed as CEO by Andrew Meslow, whom the business named main government of Tub & System Works, the conglomerate’s attractiveness retailer that will come to be a standalone community corporation.
“Les Wexner is a retail legend who has built amazing manufacturers that are domestic names all-around the world,” Allan Tessler, L Brands’ guide impartial board director, explained in a statement. “His leadership by means of this transition exemplifies his commitment to further development of Bathtub & Physique Is effective and Victoria’s Magic formula and driving total shareholder value.”
News of the offer sent L Makes shares down as a lot as 11 per cent during the investing day. Following hrs, they dropped 22 p.c, to $18.17.
Prolonged a dominant player in the worldwide lingerie marketplace, Victoria’s Key has not too long ago wrestled with falling sales and allegations of inappropriate conduct toward its designs that were being in depth in a New York Times exposé previously this thirty day period.
Reports emerged in January that L Brands was in talks to offer the brand name to Sycamore, which has formerly snapped up flailing retail outfits these types of as Talbots, Minimal, Sizzling Topic and Nine West.
Wexner — the longest-serving CEO of an S&P 500 firm — has also faced questions about his partnership with Epstein, the pedophile financier who died by suicide final August when awaiting trial on sex-trafficking fees.
Wexner has explained he’s “embarrassed” about his connections to Epstein and has accused him of misappropriating a lot more than $46 million when serving as Wexner’s dollars supervisor.
Victoria’s Solution recorded extra than $1.4 billion in full sales for the quarter that finished in early November. That quantity accounted for extra than fifty percent of L Brands’ around $2.6 billion in gross sales for the quarter but marked a 7.6 p.c lower from the similar period in the prior calendar year.
By contrast, Bath & Overall body Will work observed product sales rise in that quarter to about $1 billion from approximately $956 million the calendar year just before. Merged worldwide income for Victoria’s Key and Bathtub & Physique Works were roughly flat at about $133 million.