A New Era for L Brands: Changes and Challenges
L Brands' founder and former CEO, Les Wexner, announces his departure from the company's board.
In a significant shift for the retail industry, Leslie H. Wexner, the founder and former CEO of L Brands (the parent company of Victoria's Secret and Bath & Body Works), has officially stepped down from his role as CEO in February 2020 [1]. This move came after intense public backlash and legal pressure, particularly related to his association with Jeffrey Epstein and persistent allegations of a toxic corporate culture at the company.
Wexner, who has been a dominant figure in retail for six decades, transitioned to chairman emeritus, effectively stepping away from direct leadership [1]. While Wexner has maintained that he was unaware of Epstein’s criminal activities and portrayed himself as another victim of Epstein’s deception, his reputation has been significantly damaged by the scandal [1]. In 2021, L Brands settled shareholder derivative lawsuits for $90 million, a settlement that included commitments to major corporate governance reforms—such as banning NDAs for harassment claims and overhauling internal sexual harassment policies [1].
Victoria's Secret: A Rebrand and a Shift in Leadership
Since Wexner’s departure, Victoria’s Secret has faced criticism for its culture and branding, which was often described as out of touch and exclusionary. According to recent insights, there is an ongoing major rebrand effort [2]. During Wexner’s tenure, he resisted efforts to modernize the brand, shutting down suggestions to end the annual fashion show and refresh the brand’s voice, reportedly asserting, “I am the only voice” of the company [2].
However, since Wexner’s exit, the leadership under new management has signaled a shift toward greater inclusivity and diversity, aiming to move away from the controversial “Angels” image and address criticisms of sexual harassment and misogyny within the company [1]. The settlement of shareholder lawsuits and the accompanying governance reforms suggest a public and legal mandate for the brand to change both its internal culture and public image [1].
New Appointments to the L Brands Board
In addition to the changes at Victoria's Secret, L Brands has also made several strategic appointments to its board. Francis Hondal, president of loyalty and engagement at Mastercard, and Danielle Lee, chief fan officer at the National Basketball Association, have been appointed as independent directors to the L Brands board [3]. These appointments bring fresh perspectives and expertise to the board as L Brands navigates its ongoing transformation.
The Future of Victoria's Secret and L Brands
The full departure of Les Wexner from L Brands is considered a surprise, as plans a year ago included Wexner remaining on the board as "chairman emeritus" [3]. However, with the majority of the L Brands board, including the chair, now being women [3], the company is looking forward to a new era.
L Brands is committed to separating its Victoria's Secret and Bath & Body Works operations [4]. The company has stated that it might sell Victoria's Secret or spin it into its own publicly traded company [4]. In recent quarters, Victoria's Secret has shown improvement with fewer markdowns leading to higher margins [4]. Despite these positive signs, the brand still faces challenges in regaining its market share, which has been lost in recent years due to consumer rebellion against its marketing and public perception of sexism [5].
Les Wexner and his wife Abigail Wexner will not stand for reelection to the company's board at its annual shareholders meeting in May [6]. The departure of the Wexners marks the end of an era for L Brands and opens the door for a new generation of leadership to shape the future of the company.
- In a bid to modernize its image, Victoria's Secret has appointed Danielle Lee, the chief fan officer at the National Basketball Association, to its board, bringing fresh perspectives and expertise as the brand navigates its ongoing transformation.
- The company is currently exploring options to separate its Victoria's Secret and Bath & Body Works operations, potentially selling Victoria's Secret or spinning it into its own publicly traded company, as part of its efforts to regain market share lost due to consumer rebellion and perceptions of sexism.
- As AI and finance continue to evolve, the retail industry, exemplified by L Brands' strategic appointments like Francis Hondal, president of loyalty and engagement at Mastercard, will increasingly rely on these technologies to shape business strategies and drive growth, even during challenging times like the pandemic.
