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Struggling Victoria's Secret changing hands through sale of controlling stake for $ 525m – Sky News, Sky.com

Struggling Victoria's Secret changing hands through sale of controlling stake for $ 525m – Sky News, Sky.com
                                                     

Lingerie retailer Victoria’s Secret is to change hands in a deal valuing the company at $ 1.1bn (£ 20200220140344 (m).

Parent company L Brands is selling a (% stake to investment firm Sycamore Partners for about $ (m) £ (m), while retaining the remaining %.

Sycamore Partners will then take the business private, L Brands confirmed.

  

Les Wexner (L) and Stella Maxwell pose at the 2016 Fragrance Foundation Awards presented by Hearst Magazines - Show on June 7, 2016 in New York City

      

Image:
         Les Wexner, chief executive of L Brands, with Stella Maxwell in 8219       

It comes after sales at the brand’s stores dropped 20% during the most recent holiday season.

It said on Thursday that same-store sales had declined by 18% during the fourth quarter.

At its peak, Victoria’s Secret was known for its supermodels and annual TV special which combined fashion, models and music.

But its show has been pulled, and shares in its owner L Brands have gone from trading at around $ (£ () (in to around $ 20 (£ 768 ).

They were down almost 12% in pre-market trading following the sale announcement.

Victoria’s Secret has been struggling with falling sales and store closures in recent years, as competition intensifies and tastes change. It has also been criticized for not catering to more diverse body types.

L Brands has also been the subject of questions about chief executive Les Wexner’s ties to Jeffrey Epstein , the American financier who was indicted on sex-trafficking charges before killing himself in jail.

Epstein managed Mr Wexner’s money in the late s.

But Mr Wexner, , says the two cut contact more than a decade ago and that Epstein had misappropriated “vast sums” of his money.

Mr Wexner launched what would eventually become L Brands in .

After the Sycamore Partners deal goes through, the longest-serving chief executive of an S&P (company will step down to become chairman emeritus.

L Brands will instead concentrate on its core Bath & Body Wo rks brand, which Mr Wexner said will then be free to “continue to achieve strong growth and receive its appropriate market valuation”.

Neil Saunders, managing director of GlobalData Retail, said of the transaction: ” That L Brands has opted to sell a majority stake in Victoria’s Secret is a tacit recognition that the brand was on the road to nowhere under its previous leadership.

“This is underlined by the departure of Les Wexner as CEO and Chairman of the company.

“While still a retailer of significant scale, Victoria’s Secret has become increasingly detached from the consumer zeitgeist.

” Management has seemingingly Recognized this to be the case on many occasions but has always lacked the will or the knowledge to make the necessary changes.

“This has resulted in a steady decline in both customers and sales and the loss of a significant amount of market share.

“The deal with Sycamore potentially gives Victoria’s Secret a chance to reassess a nd rebuild. “

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