Victoria’s Secret, beset by falling sales and uncomfortable questions about its billionaire founder who has run the company for five decades, is being sold.
The company’s owner, L Brands, said that the private-equity firm Sycamore Brands will buy 55% of Victoria’s Secret for about $525 million. The Columbus, Ohio, company will keep the remaining 45% stake.
Shares of the parent, L Brands, slid 14.6% in premarket trading Thursday.
The selling price signifies a marked decline for a brand with hundreds of stores that booked about $7 billion in revenue last year.
Victoria’s Secret’s overtly sexy style has clashed with a new attitude from young women who want more inclusive fits. And it’s 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 haven’t been enough to stop sales declines. During the holiday season, Victoria’s Secret suffered a 12% drop in same-store sales. It said Thursday same-store sales declined 10% during the fourth quarter.
L Brands has also come under scrutiny because of its billionaire CEO Leslie Wexner, the longest-serving CEO of an S&P 500 company who has helmed the company for more than five decades. Wexner 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.
Last year Wexner accused the late financier Jeffrey Epstein, who was indicted on sex-trafficking charges, of misappropriating “vast sums” of his fortune while managing his personal finances more than a decade ago.
Wexner will step down after the transaction is completed and become chairman emeritus.