Thursday, February 20, 2020

Private equity firm buys controlling stake in Victoria's Secret

New York: Victoria's Secret – beset by falling sales and uncomfortable questions about its billionaire founder – is being sold off.

Victoria’s Secret founder Leslie Wenxer has come under intense scrutiny for his links to the late sex offender, Jeffrey Epstein.Credit:AP

The company's owner, L Brands, said that the private equity firm Sycamore Brands will buy 55 per cent of Victoria's Secret for about $US525 million ($785 million). The Columbus, Ohio company will keep the remaining 45 per cent stake.

Shares of the parent, L Brands, slid 14.6 per cent in premarket trading on Thursday.

The selling price signifies a marked decline for a brand with hundreds of stores that booked about $US7 billion in revenue last year.

Sales at its stores are in decline because competition is increasing and tastes are changing.

Victoria's Secret suffered a 12 per cent drop in same-store sales during the most recent holiday season. It said on Thursday same-store sales declined 10 per cent at Victoria's Secret during the fourth quarter.

L Brands has also come under scrutiny because its CEO, Les Wexner, has ties to the late financier Jeffrey Epstein, who was indicted on sex-trafficking charges.

Wexner will step down after the transaction is completed and become chairman emeritus.

AP

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