Columbus-based L Brands announced Thursday that longtime CEO Les Wexner is stepping down from his position, while the company sells off a majority stake in lingerie brand Victoria's Secret to a private equity firm.
An email sent Thursday morning says Wexner will become chairman emeritus.
Victoria's Secret and its offshoot PINK are being acquired by New York-based Sycamore Partners, which purchased a 55% interest for approximately $525 million. L Brands will retain a 45% stake in Victoria’s Secret.
Bath & Body Works will become a stand-alone public company with Andrew Meslow being promoted to CEO. Once the sale of Victoria's Secret is complete, Meslow will become CEO of L Brands.
Meslow joined L Brands in 2003, and spent the last 15 years working at Bath & Body Works.
"We believe the separation of Victoria's Secret Lingerie, Victoria's Secret Beauty and PINK into a privately held company provides the best path to restoring those businesses to their historic levels of profitability and growth," Wexner said in a statement.
In Thursday's press release, L Brands reported it expects an overall 2% decline in sales in the fourth quarter, including a 10% decline at Victoria's Secret. Bath & Body Works reported a 10% increase in sales.
Shares of L Brands slid 7% Thursday following the announcement.
Internal Struggles
Under Wexner’s watch, Victoria’s Secret soared to worldwide fame with sales of $7 billion a year. Those sales have slumped in recent years amid changing consumer demands. Last year, Victoria's Secret laid off 15% of its corporate office employees as part of a restructuring.
The company opted to cancel its iconic fashion show last year, although L Brands’ Chief Financial Officer Stu Burgdoerfer said it could eventually return.
Wexner has also faced increasing calls to step down because of his connection to accused child sex trafficker Jeffrey Epstein. Epstein, who died last year, was a long-time financial adviser to Wexner, and had power of attorney over Wexner's fortune. Both men invested in a New York mansion in 1989, and were listed together as co-presidents of the New Albany Company in the '90s.
Wexner repeatedly said he never knew about Epstein’s alleged crimes, and claims Epstein "misappropriated vast sums of money from me and my family." Wexner says he cut ties with Epstein in 2007 - the same year Epstein reached a plea deal over charges that he recruited dozens of underage girls for sex.
Earlier this month, the L Brands board of directors released an apology in response to an investigation published by the New York Times about Victoria's Secret's "culture of misogyny." The newspaper reported that Wexner and a former executive permitted a sexist and unsafe work environment at Victoria's Secret, with employees saying they faced persistent inappropriate conduct and faced retaliation for reporting misbehavior.
“With the adoption in recent years of even more robust anti-harassment policies, hotline reporting, and training, we have made significant strides in ensuring that the company provides a safe, welcoming, and empowering workplace for every associate,” the board said in a statement. “We regret any instance where we did not achieve this objective and are fully committed to continuous improvement and complete accountability.”
Wexner grew up in Dayton before attending The Ohio State University. He started his first The Limited store in Upper Arlington's Kingsdale Shopping Center in 1963 and took the company public in 1969. He’s served as CEO ever since, and is now the longest-serving chief executive among all Fortune 500 companies.
Wexner spoke about opening his first store as part of WOSU's https://youtu.be/z-Cnr41sqFE?t=2620" target="_blank">Columbus Neighborhoods: Tri-Village documentary.
https://www.youtube.com/watch?v=sPPujX3yFV4&feature=youtu.be
This article may be updated with more information as the story develops.
