Victoria’s Secret, the US lingerie giant which has been beset by falling sales and uncomfortable questions about its billionaire founder, is being sold.
Its owner L Brands said private equity firm Sycamore Brands will buy 55% of Victoria’s Secret for about $525 million (£407 million). Once the deal is complete Les Wexner, who has run the business for five decades, will step down.
L Brands, based in Columbus, Ohio, will keep the remaining 45% stake. Shares in L Brands slid 14.6% in pre-market trading on Thursday.
The selling price signifies a marked decline for a brand with hundreds of stores that booked about $7 billion (£5.4 billion) in revenue last year.
Sales at its stores are in decline because competition is increasing and tastes are changing. Younger consumers in particular, who make up the brand’s main target base, are drawn to more inclusive and less overtly sexual brands.
Victoria’s Secret has also been forced to drop its once world renowned fashion show in which supermodels, dubbed “Angels”, paraded down a catwalk wearing underwear and wings. Stories abounded about the lack of diversity in the shows and the gruelling diet and exercise regimes models had to undertake to take part.
L Brands has also come under scrutiny because Wexner has ties to the late financier Jeffrey Epstein, who was indicted on sex-trafficking charges, before taking his own life last year. Wexner has said he was “embarrassed” by his association with Epstein, his former personal financier, which ended in 2007.
Wexner will leave the brand after the deal but take the honorary title of chairman emeritus. Reports emerged of a possible sale and Wexner’s exit at the end of last month.
Victoria’s Secret suffered a 12% drop in same-store sales during the most recent holiday season. It said same-store sales declined 10% during the fourth quarter. The brand has around 25 stores in the UK.