COLUMBUS (WCMH)–According to reports in the Wall Street Journal and the New York Times, Les Wexner is in discussions about the possibility of stepping aside as CEO of L Brands, as well as, selling off part or all of Victoria’s Secret.
In the article released Wednesday, the discussions for both possibilities are ongoing, and a decision could be made in the coming weeks. Tristan Navera, a reporter with Columbus Business First, says activist hedge fund Barington Capital Group has been pushing for change.
“They sent a letter to Mr. Wexner in March basically saying that they think some changes should happen in the company, that it’s got a dated image, that there’s a lot that they needed to turn around,” Navera said. “One of the biggest complaints that they had was that he has too much control over the overall company and so it doesn’t have a diverse set of viewpoints helping him to try to turn around some of the sales.”
The reported talks come as Victoria’s Secret’s overtly sexy style has clashed with a new attitude from young women who want more inclusive fits. It is also facing increasing competition from lingerie online natives like Adore Me and ThirdLove, which use more diverse models and offer more comfortable styles. While Victoria’s Secret has made some moves to change its marketing, the efforts have not been enough to stop sales from delining.
During the holiday season, Victoria’s Secret suffered a 12% drop in same-store sales.
Randal Konik of Jefferies said in an analyst note that he agreed that a “fresh perspective would likely be a positive in ‘righting the ship,'” but that there are still significant challenges ahead for Victoria’s Secret, including increased competition and the brand relying heavily on promotions.
In recent years, Wexner’s relationship with financier Jeffrey Epstein has come under scrutiny.
Epstein worked as Wexner’s personal finance manager and a document on file in Franklin County shows Epstein was given power of attorney over much of Wexner’s financial affairs in 1991.
During his address to shareholders last year, Wexner called Epstein’s behavior “abhorrent” and “something that we would all condemn.
“He has said and the company has said they are investigating if there are any ties there,” Navera said. “They haven’t really published anything yet, but the fact that he has that connection has continued to drag the company down a bit.”
Wexner is the longest-serving CEO of an S&P 500 company, having served as CEO for more than five decades. He founded what would eventually become L Brands in 1963 with one The Limited retail store, according to the company’s website.
Wexner owns approximately 16.71% of L Brands, according to FactSet. A spokesperson with L Brands says they have no comment on the report.