Victoria's Secret Sells, Les Wexner Stepping Down

Frazer Harrison/Getty Images for Victoria's Secret

Private equity firm Sycamore Partners bought a 55 percent stake for $525 million, following investments in Staples, Aeropostale, Hot Topic, Stuart Weitzman and more.

Victoria's Secret has been sold.

Its parent, L Brands, has given up 55 percent of the company, including the Pink label, for about $525 million. The buyer, Sycamore Partners, is a New York-based private equity firm that has invested in Staples, Aeropostale, Hot Topic, Stuart Weitzman, Torrid, Talbots, Nine West and more.

L Brands chairman and CEO Les Wexner will step down but remain on the board as chairman emeritus following a string of bad press about his ties with convicted sex offender Jeffrey Epstein and allegedly fostering a toxic work culture that included cases of sexual harassment. 

Victoria's Secret has suffered financially in recent years. Its annual televised fashion show was canceled in November after low ratings, and the store saw a 20 percent decline in foot traffic during the 2019 holiday season compared to that of 2018, according to intelligence firm Cuebiq.

Chief marketing officer Ed Razek resigned from the company last year after resisting more progressive moves seen elsewhere in the fashion industry. Razek spoke out against hiring plus-size and transgender models "because the show is a fantasy." Victoria's Secret CEO Jan Singer also "left suddenly" in 2018, according to CNBC, making L Brands founder Wexner's exit the latest personnel change as the lingerie retailer attempts to get a fresh start. 

"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 these businesses to their historic levels of profitability and growth," Wexner said in a statement. "Sycamore, which has deep experience in the retail industry and a superior track record of success, will bring a fresh perspective and greater focus to the business. We believe that, as a private company, Victoria's Secret will be better able to focus on longer-term results."

Stefan Kaluzny, managing director of Sycamore Partners, added in a statement, "With unmatched global brand awareness and customer loyalty, we believe there is a significant opportunity to reinvigorate growth and improve the profitability of Victoria's Secret. We look forward to partnering with the leadership team to pursue these objectives."

As Victoria's Secret becomes a privately held company, L Brands will continue to own and operate fellow mall staple Bath & Body Works as a stand-alone public company, with Andrew Meslow promoted to CEO. L Brands will use the funds from the sale to pay off debts. 

Jon Reily, senior vp and global head of commerce strategy for digital consultancy Isobar, told The Hollywood Reporter earlier this month that the sale is a sign of the times. “Between shifting consumer sentiment and rapidly changing social constructs thanks to #MeToo and gender awareness, Victoria's Secret has rapidly fallen into almost a 20th century mind-set for many consumers," Reily said. "Social responsibility is do or die now and it's hard to not be on the wrong side of those conversations."