Victoria’s Secret parent, L Brands and CEO Wexner, target of activists amid Epstein connection, Wall Street says

L Brands CEO Leslie Wexner is under fire for his Epstein ties among other things

Troubled retailer L Brands, parent of Victoria’s Secret and Bath & Body Works, is expected to come under significant pressure from potential activist shareholders for a major restructuring and possibly the ouster of its chief executive Leslie Wexner, FOX Business has learned.

Investment banking sources say the move could come in the next few weeks as it becomes increasingly clear the company’s strategy isn’t working and that an impediment to a breakup of the company is Wexner, the 82-year-old retailing magnate, and company founder.

The retailer, with a market value of $4.3 billion, has been suffering from a sharp decline in sales particularly from its iconic but struggling lingerie unit, Victoria’s Secret. Shares of L Brands are down more than 83 percent from their 2015 high of nearly $97.

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But shares of L Brands popped 3% off their lows following the FOX Business report of the likely coming activist pressure and began trading higher after the market close on Wednesday despite posting a wider-than-expected third-quarter loss of $252 million or $0.91 per share and a 2 percent drop in same-store sales.

The activist play is said to be related to several factors aside from what investors believe is a need to break up the company including Wexner’s past association with convicted pedophile Jeffrey Epstein who for decades had managed Wexner’s money; Epstein was also a trustee at the Wexner Foundation.

Wexner recently said he has had no association with Epstein for nearly a decade, but the former relationship continues to taint the companies’ various brands. Investors believe that the company could gain tremendous value by shedding various assets—particularly Victoria’s Secret—and instead focus on fragrance and cosmetic brand, Bath & Body Works. Another option is to completely sell off various parts of the entire company.

They also say these moves are unlikely to happen with Wexner in firm control of the company, thus any activist would demand board seats to dilute his role in L Brands’ management or demand his removal as CEO. Wexner owns 17 percent of L Brands according to FactSet and is one of the company’s largest shareholders.

FOX Business could not determine which activists are eying L Brands. A spokeswoman for L Brands had no immediate comment.


Research firm Gordon Haskett recently raised the possibility of an activist play for L Brands, noting Wexner’s unwillingness to make changes at the troubled company.

“Wexner… hasn’t shown much interest in breaking the company apart. The stock has since been crushed and Wexner’s reputation has been shattered by his association with Jeffrey Epstein...”

- Gordan Haskett, November 15 note to clients

In March, CNN Business reported that activist investor, Barington Capital, which owns a small stake in L Brands, should begin shedding assets such as Victoria’s Secret. L Brands responded that it "welcomes open communications with our shareholders and values input that may advance our goal of enhancing shareholder value."


Wexner, a billionaire and the richest man in Ohio, said he stopped dealing with Epstein following the money manager's 2008 plea deal to a single count of having sex with an underage girl and soliciting a prostitute. Earlier this year, federal prosecutors charged Epstein with child sex trafficking, alleging he had sex with dozens of under-aged girls.

In August, Epstein hung himself in his jail cell after pleading not guilty to the most recent accusations. This week two federal corrections guards were arrested for allegedly failing to perform required checks on the prisoner.