Leslie Wexner, the longtime L Brands CEO and mastermind behind the Victoria’s Secret and The Limited brands, might be stepping down from the post that he has helmed for nearly six decades, according to a report from The Wall Street Journal. L Brands has not commented on the report.
Wexner is the longest-serving CEO of an S&P 500 company, founding what would eventually become L Brands in 1963 with one The Limited retail store. Wexner may stay on as chairman if he steps down, according to the report. He remains the company’s biggest shareholder, with a roughly 17% stake.
Additionally, Wexner and L Brands are considering strategic alternatives for Victoria’s Secret that could include a full or partial sale of the lingerie business, cited the report. Last year, hedge fund Barington Capital Group LP built a small stake in L Brands and urged the company to consider splitting the fast-growing Bath & Body Works chain from Victoria’s Secret.
Victoria’s Secret has held down the overall L Brands portfolio in recent years, with the retailer shuttering 53 of its 1,140+ stores in 2019. Store traffic dropped 19% from nearly 10.5 million shoppers in Q4 2018 to 8.5 million shoppers in Q4 2019, according to data from Quebiq. During the holiday season, Victoria’s Secret suffered a 12% drop in same-store sales.
While Bath & Body Works has kept L Brands afloat (the retailer saw a 9% same-store sales jump during the holiday), it hasn’t been enough to drive investor confidence in the overall company’s future. Shares of L Brands dropped 29% in 2019 and the company now has a market value of $6.4 billion, down from $29 billion at its peak in 2015.
The Victoria’s Secret brand has seen sweeping changes in the midst of changing consumer preferences, particularly from those seeking to shop for more size-inclusive lingerie and intimates options. Over the past decade, brands such as American Eagle’s Aerie, ThirdLove and Adore Me have thrived amid meeting these expectations and shying away from the risqué marketing tactics traditionally employed by Victoria’s Secret.
The biggest change came when Ed Razek, CMO of L Brands since 1983, stepped down from the role in August 2018. Under Razek’s creative direction, the lingerie retailer built an overtly sexualized brand image that helped boost the company’s popularity throughout the 1990s and 2000s. Furthering the company’s pop culture influence, Victoria’s Secret first launched its popular Fashion Show in 1995, featuring models, called “Angels,” wearing and promoting lingerie on the runway. The retailer recently ended the Fashion Show after viewership dropped.
In October, Victoria’s Secret laid off 50 employees at its Columbus, Ohio headquarters, which was approximately 15% of the workforce there. On the day this news came out, the company revealed that April Holt, EVP of Stores and Store Operations, would be leaving her position.