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Wexner Era Ends at L Brands

Les Wexner and his wife, Abigail, won’t stand for re-election to the board in May, bringing six decades of leadership to a close for a retail empire now in transition.
(L-R) Les Wexner and Ed Razek | Source: Getty Images

Les Wexner is leaving the board of L Brands Inc., bringing an end to a long — and recently troubled — relationship with a company he built into a retail empire.

Wexner, 83, and his wife, Abigail, won’t stand for re-election at the annual shareholder meeting in May, the company said Thursday. Wexner had already relinquished his chairman seat last year at L Brands, the owner of Victoria’s Secret, though he had maintained a chairman emeritus role.

The decision caps a nearly six-decade run for Wexner, whose once-sprawling company is now being dismantled. Victoria’s Secret, which has struggled with changing consumer tastes and controversy amid the #metoo movement, is being split off in the coming months, leaving only the Bath & Body Works chain.

“I am more confident than ever that we have very positive momentum as we approach the planned separation into two businesses,” he said in a statement. “Now is an ideal time for Abigail’s and my transition from the board.”

Wexner himself has come under scrutiny in recent years over his ties to disgraced financier and convicted sex offender Jeffrey Epstein. Wexner, who remains L Brands’ largest shareholder with a stake of about 16 percent, according to Bloomberg data, stepped down as chief executive officer last year.

L Brands shares rose less than 1 percent at 10:51 a.m. in New York. The stock has gained 64 percent this year through Wednesday.

Retail Empire

Wexner started the company in 1963 with a single store specializing in women’s apparel called the Limited. The business grew over the years, launching the Express chain and acquiring Lane Bryant before Wexner bought Victoria’s Secret for $1 million in 1982. Three years later, he acquired Henri Bendel and Lerner Stores, which would later become New York & Company, and added Abercrombie & Fitch later that decade.

In the late 1980s, as his fortune grew, Wexner put his roots in the small Ohio town of New Albany and started to transform it into his suburban oasis. His sprawling 60,000-square-foot villa is its centrepiece, about a 20-minute drive away from L Brands headquarters in Columbus. Wexner now has a net worth of $9.3 billion, according to the Bloomberg Billionaires Index.

Over the years, L Brands shed several of its brands while focusing on businesses such as lingerie. Under Wexner, Victoria’s Secret became a leading underwear label in the US, peaking at $7.8 billion in revenue in fiscal 2017.

But its fortunes turned in recent years, as the sexy, push-up bra aesthetic has given way to competing products marketed as more comfortable, inclusive and body-positive. Customers have increasingly turned to rivals that embrace female empowerment and diverse body types, like Aerie and ThirdLove.

Annual sales for Victoria’s Secret have been on the decline, and the brand closed nearly 250 stores in 2020, with as many as 50 more planned for this year.

‘Fresh Look’

The brand took a hit in 2019 when Wexner’s ties to Epstein came under scrutiny. Wexner employed Epstein as a personal money manager for years, building a relationship close enough for Epstein to buy his Manhattan mansion before severing ties more than a decade ago. Epstein died while awaiting trial on federal sex-trafficking charges.

That year, Wexner told employees he would take a “fresh look” at Victoria’s Secret and considering changing its brand position, marketing and real estate. Management pulled its lingerie fashion show from network television after a 23-year run, after ratings had hit an all-time low.

Earlier this year, Wexner and other longtime senior leaders at L Brands were hit with a shareholder lawsuit in Delaware over what it called the company’s “entrenched culture of misogyny, bullying and harassment, as well as ties to Jeffrey Epstein and other egregious mismanagement.”

Now only Victoria’s Secret, its sister label Pink and Bath & Body Works remain a part of L Brands, before a planned split of the lingerie business by August. The company has said it hasn’t yet determined the method for that move, but management is reviewing “all options,” including a private sale or turning Victoria’s Secret into a public company.

The move comes after an earlier attempt to sell Victoria’s Secret to Sycamore Partners collapsed last spring.

With the departure of the Wexners, L Brands said Thursday that Francis Hondal, president of loyalty and engagement at Mastercard, and Danielle Lee, chief fan officer for the National Basketball Association, have been appointed as two new independent directors. As of May, the board will consist of 10 directors, nine of whom are independent and six of whom are women. Abigail Wexner had been a director since 1997.

By Anne Riley Moffat and Kim Bhasin.

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