Retail tycoon Leslie Wexner will go away the helm of his L Brands conglomerate amid scrutiny of his earlier ties to Jeffrey Epstein, as the business sells off its struggling Victoria’s Solution lingerie brand.
Wexner, 82, will move down as CEO and chairman of L Brands, which he established and has led for many years, immediately after non-public equity agency Sycamore Companions takes handle of Victoria’s Secret in a offer valuing the underwear chain at about $1.1 billion, the business announced Thursday.
Sycamore will pay back about $525 million for a 55 per cent stake in Victoria’s Mystery, which will grow to be a separate privately held organization with L Manufacturers holding the remaining 45 p.c, in accordance to a news launch. That seems to be a steep low cost for a brand name that posted more than $7 billion in net income during L Brands’s 2018 fiscal calendar year.
Wexner will stay on the L Models board but will ultimately be changed as CEO by Andrew Meslow, whom the firm named chief executive of Bathtub & Physique Operates, the conglomerate’s beauty retailer that will become a standalone general public firm.
“Les Wexner is a retail legend who has created extraordinary brands that are household names about the world,” Allan Tessler, L Brands’s guide impartial board director, mentioned in a statement. “His management by this changeover exemplifies his commitment to additional progress of Bathtub & Human body Performs and Victoria’s Magic formula and driving all round shareholder value.”
Information of the offer despatched L Models shares down 11.3 percent to $21.81 in premarket investing as of 9:04 a.m.
Long a dominant player in the world-wide lingerie market place, Victoria’s Magic formula has just lately wrestled with slipping income and allegations of inappropriate conduct toward its models that ended up in-depth in a New York Times exposé previously this thirty day period. Reports emerged in January that L Makes was in talks to sell the brand to Sycamore, which has formerly snapped up flailing retail outfits these kinds of as Talbots, Restricted, Incredibly hot Subject matter and Nine West.
Wexner — the longest-serving CEO of an S&P 500 organization — has also confronted thoughts about his connection with Epstein, the pedophile financier who died by suicide very last August awaiting trial on intercourse-trafficking costs.
Wexner has claimed he’s “embarrassed” about his connections to Epstein and has accused him of misappropriating extra than $46 million when serving as Wexner’s funds supervisor.
Victoria’s Secret recorded extra than $1.4 billion in overall profits for the quarter that finished in early November. That volume accounted for much more than fifty percent L Brands’s around $2.6 billion in sales for the quarter but marked a 7.6 % lessen from the comparable period in the prior year.
By contrast, Bathtub & Physique Operates noticed revenue increase in that quarter to about $1 billion from approximately $956 million the year just before. Blended intercontinental product sales for Victoria’s Magic formula and Tub & System Functions had been around flat at about $133 million.