L Brands announces the departure of Les Wexner from its board of directors.
In a significant move, Les Wexner, the founder of L Brands, has decided to fully depart from the company he built, with his wife Abigail Wexner also stepping down from the board at the annual shareholders meeting in May. The decision comes amidst mounting public backlash and legal pressures related to Wexner's association with the convicted sex offender, Jeffrey Epstein.
Wexner had stepped down as CEO a year ago, transitioning to the chairman emeritus role, but the plan was for him to continue in this role as chairman emeritus. However, extensive criticism arose over his ties to Epstein and allegations of a pervasive culture of sexual misconduct and misogyny within the company. Shareholders filed derivative lawsuits accusing L Brands' leadership of failing in their fiduciary duties by not investigating Wexner’s relationships and ignoring internal issues.
Despite Wexner's denial of awareness of Epstein’s criminal conduct and his claim to be a victim of Epstein’s fraud, his reputation suffered significantly. In 2021, L Brands settled litigation for $90 million, which included reforms such as banning non-disclosure agreements (NDAs) in harassment cases and revamping sexual harassment policies.
As for the future of the Victoria's Secret brand, which remains a key part of L Brands (now Bath & Body Works, Inc.), the company is focusing on improving its image and modernizing the brand following years of controversy. The Victoria's Secret Fashion Show for 2024 is still scheduled, indicating ongoing brand activity. L Brands has split into two publicly traded companies, Bath & Body Works and Victoria's Secret & Co., with plans to focus on rejuvenating Victoria's Secret as a distinct and fresh brand entity.
The demographic that has increasingly turned away from the company's Victoria's Secret brand in recent years is not specified. However, the brand has steadily given up market share as consumers rebelled against its "glamazon" marketing and public perception tagged it as more sexist than sexy.
In a positive move, 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. With these changes, the L Brands board will have 10 directors, nine who are independent and six who are women, including board chair Sarah Nash.
In conclusion, Wexner's step down was a response to reputational damage and legal fallout connected to Epstein and corporate governance issues, and Victoria's Secret is being positioned as a revitalized brand with its own independent growth strategy. The future looks promising for L Brands as it navigates through these challenges and strives to regain the trust of its customers.
[1] Source: L Brands' SEC Filings [2] Source: L Brands' Press Release on Company Split
- In the wake of the scandal surrounding Jeffrey Epstein's criminal conduct and allegations of a toxic culture within L Brands, Les Wexner's reputation took a hit in both the business and finance realms, leading to significant pressure from shareholders and resulting in the appointment of independent directors like Francis Hondal and Danielle Lee to strengthen the company's governance.
- Amidst growing consumer dissatisfaction and market share decline due to perceived sexism in its advertising tactics, Victoria's Secret, a key component of L Brands, is aiming to rebrand itself as a more modern and inclusive entity, as evidenced by the scheduled Victoria's Secret Fashion Show for 2024 and the company's decision to split into two separate, publicly traded entities.
- The decision by Les Wexner, the founder of L Brands, to fully depart from the company he built and his wife Abigail Wexner's resignation from the board, has been a consequence of the pandemic of negative publicity and legal issues surrounding their association with Jeffrey Epstein. This decision marks a shift in the company's leadership and business trajectory.
