• by Thom Forbes  @tforbes, January 30, 2020

Leslie Wexner, the 82-year-old founder of L Brands whose reputation has been tarnished by his retention of Jeffrey Epstein as a financial advisor, is reportedly looking to unload all or some of its Victoria’s Secret operations and to step aside as CEO of the parent company.

“L Brands Inc. is in discussions with Sycamore Partners, a private-equity firm that has scooped up several troubled apparel brands,” sources tell The Wall Street Journal’s Khadeeja Safdar and Corrie Driebusch, who broke the story. 

“The discussions are ongoing and could result in a full or partial sale of Victoria’s Secret, some of the people said. The chain, with about $7 billion in annual sales, has long dominated the U.S. lingerie market but has struggled in recent years with falling sales. The company is looking to reach a decision on the potential deal and succession plans in coming weeks, some of the people said,” they add.

Wexner owns about 17% of L Brands and is its biggest shareholder, according to  TheRealDeal. He may remain as chairman, the WSJ reports.

“Wexner first began building his retail empire back in Ohio back in the 1960s, developing specialty mall brands like Abercrombie & Fitch, The Limited and Victoria’s Secret and turning them into national brands,” Sergei Klebnikov writes  for Forbes.

“Victoria’s Secret -- which has about 1,100 stores in the U.S. and Canada -- saw sales sink 12% in November and December amid a slowdown in store traffic. It also scrapped its annual fashion show last year as L Brands worked to ‘evolve the marketing’ of the brand, which has remained largely the same for decades,” Noah Manskar and Lisa Fickenscher write  for the New York Post.

“Victoria’s Secret sales have declined as women are gravitating toward lingerie brands like Adore Me, ThirdLove and American Eagle’s Aerie, which are seen as more inclusive,” CNBC’s Lauren Hirsch and Hannah Miller point out.

“Epstein, who was indicted on federal sex-trafficking charges last summer, committed suicide  in August 2019, while awaiting trial in a New York City prison,” Klebnikov reminds us.

“Wexner came under intense pressure for having employed Mr. Epstein as a personal adviser for years and handing him sweeping powers over his finances, philanthropy and private life. Mr. Epstein was empowered to borrow money on behalf of Mr. Wexner and sign Mr. Wexner’s tax returns, as well as hire people and make acquisitions. Over the years, Mr. Epstein obtained a mansion in Manhattan, a luxury estate in Ohio and a private plane -- possessions worth roughly $100 million together today -- that had previously been owned by Mr. Wexner or his companies,” Jessica Silver-Greenberg, Sapna Maheshwari and Katherine Rosman write for The New York Times.

“News of the relationship spurred chaos inside a company that was already struggling to keep up with changing beauty ideals among American women and had only recently made board changes at the behest of an activist investor,” they add.

“Wexner said he cut ties with Epstein in 2007,” Nathaniel Meyersohn writes  for CNN Business. “In September, Wexner said that he was ‘embarrassed’ that he put his trust in Epstein. ‘Being taken advantage of by someone who was so sick, so cunning, so depraved is something that I am embarrassed that I was even close to, but that is in the past,’ Wexner said,” Meyersohn adds.

“Activist fund Barington Capital Group last year took a stake in L Brands and criticized the company’s performance and questioned the independence of its board. L Brands and Barington later reached a truce that added the fund as a special advisor to the company. The agreement also added board members Anne Sheehan, chair of the Securities and Exchange Commission’s investor advisory committee, and Sarah Nash, CEO of Novagard Solutions. The deal with Barington allowed Wexner to remain on the board, despite Barington’s original contention the dual role of CEO and chairman gave him too much power,” CNBC’s Hirsch and Miller report. 

“Wexner’s central Ohio legacy extends far beyond L Brands,” reads  the headline above Jim Weiker’s story for The Columbus Dispatch. 

His “impact on central Ohio can be felt from the fields of New Albany to the operating rooms of Ohio State University’s Wexner Medical Center. As Wexner appears ready to step back from the day-to-day operations of L Brands, his civic role comes into sharper focus, although quantifying it is a daunting task,” Weiker continues before attempting to do just that with an impressive list of his charitable contributions.

“With its subsidiaries such as Abercrombie & Fitch, L Brands also put central Ohio on the fashion map, helping the community become the nation’s third-largest center of fashion design, according to one study,” Weiker adds.

The big question is whether Victoria’s Secret can regain its relevance and appeal. In analyzing the potential spin-off of the brand for Yahoo News, Bloomberg’s Andrea Felsted writes:   “Victoria’s Secret clearly needs a new angel. Finding one might be too much of a miracle to pull off.”