L Brands Inc. (NYSE: LB) CEO Leslie Wexner will be chased from his job by news reports of his close relationship with serial sex offender Jeffrey Epstein. That will permanently tarnish his reputation as a man. Wexner will leave as head of L Brands as it sells its flagship Victoria’s Secret to Sycamore Partners for only $1.1 billion, for which gets it 65% of the business. L Brands will keep the remainder. Wexner’s other legacy was the amount of shareholder value he has destroyed in the past five years.
Wexner is the founder of L Brands, and he has had complete control of the public company. That has been part of the problem. His financial, marketing and merchandising plans have been disastrous. He has, in particular, let the Victoria’s Secret brand age without repositioning it.
In the past five years, L Brand shares are down 74%. The S&P 500 is up by 61% in the same period. The drop is just as bad as staggered Macy’s is. And Macy’s lacks a brand with the massive appeal of Victoria’s Secret. Victoria’s Secret has over 900 locations, many of them in prime and highly visible locations.
L Brands’ most recent fumble was holiday sales. It reported net sales of $3.906 billion for the nine weeks ended January 4, compared to net sales of $4.072 billion for the same period a year ago. Comparable store sales across all brands dropped 3% for the period. Victoria’s Secret’s comparable store sales fell 12%. It is a wonder that Sycamore will pay such a high price for a brand that is in a flat spiral down.
Wexner leaves with both his life and history as a CEO completely destroyed.
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