Les Wexner, chief government of Victoria’s Secret dad or mum L Brands, has by no means been beneath extra strain.
The corporate, which additionally owns Bathtub & Physique Works, has seen its shares fall 37% year-to-date. Gross sales have lagged at Victoria’s Secret as buyers more and more see its merchandise as exclusionary and too provocative within the “Me Too” period.
Maybe most troubling of all of the shadows over Wexner, nevertheless, is that of late intercourse prison Jeffrey Epstein. The retail tycoon earlier this yr acknowledged his shut ties to Epstein, together with that he gave the disgraced financier energy of lawyer.
However not like another rich and highly effective Epstein associates, Wexner has but to face penalties for his relationship with the accused youngster intercourse trafficker, who died earlier this yr. There have been no public cries for Wexner’s resignation from board members or notable traders.
L Manufacturers is anticipated to report its third-quarter earnings after the bell on Wednesday.
Past a couple of public expressions of remorse over Epstein, little has modified for Wexner, who’s 82. He stays CEO and chairman of L Manufacturers, in addition to considered one of its largest shareholders, with a virtually 17% stake, in response to FactSet.
The corporate’s board stays largely comprised of various individuals pleasant to Wexner that one trade insider known as “the Ohio Mafia.” They embody his spouse, Abigail Wexner, American Electrical Energy CEO Michael Morris and Huntington Bancshares CEO Stephen Steinour. L Manufacturers, Huntington Bancshares and American Electrical Energy are all primarily based in Columbus, Ohio,
Wexner said in August he first met Epstein within the mid-1980s by associates who vouched for the financier. Epstein was a trustee of the Wexner Basis, though Wexner has stated Epstein had no government duties. In a letter to the muse in August, Wexner stated Epstein had misappropriated greater than $46 million from Wexner and his household years in the past. He solely just lately provided documents to federal prosecutors about the missing money. He has not defined why he didn’t pursue prices when he found the funds have been lacking.
“Being taken benefit of by somebody who’s … so wicked is one thing I am embarrassed I am even near,” Wexner stated at the L Brands’ investor day in September.
“We’re all betrayed by associates,” stated Wexner. “On the finish the day, individuals have secret lives as a result of … they’re so good at hiding these secrets and techniques.”
Epstein, whose demise in August was ruled a suicide by hanging, was arrested in July on federal child sex trafficking charges. He was accused of sexually abusing dozens of underage ladies from 2002 by 2005 at his huge townhouse in New York Metropolis and his mansion in Palm Seaside, Florida. He beforehand pleaded responsible in 2008 to soliciting an underage prostitute in Florida. He served 13-months in jail for the cost although a lot of that point granted him work launch.
L Manufacturers has stated it minimize ties with Epstein practically 12 years in the past and known as his alleged crimes “abhorrent.” The corporate has been working with legal counsel to assessment the corporate’s ties to Epstein, though it has stated it doesn’t consider he ever served as a certified consultant of the corporate. Wexner’s spouse, Abigail, beforehand labored on the legislation agency L Manufacturers employed to conduct the assessment, Davis Polk.
Epstein had friendships or associations with a number of of the richest and strongest males on this planet, together with Presidents Donald Trump and Bill Clinton. Microsoft founder Invoice Gates has said he made a mistake in meeting with Epstein years after the financier pleaded responsible to intercourse crimes.
A few of Epstein’s well-connected associates have confronted blowback. Prince Andrew of Britain misplaced at the least one company sponsor of his [email protected] initiatives following a disastrous interview with the BBC about Epstein. Prince Andrew stated Wednesday he’ll “step back from public duties for the foreseeable future.”
Entrepreneur Joi Ito earlier this yr resigned from his position as director MIT Media Lab and several other company boards after admitting he took cash from Epstein.
Whereas Wexner has but to face any such penalties, there have been adjustments on the L Manufacturers board that predate the Epstein revelations.
Activist fund Barington Capital Group in March sent a letter to L Brands criticizing the corporate’s efficiency. It stated the board members’ “social and enterprise relationships” with Wexner raised “critical questions as to the true independence” of its administrators.
L Manufacturers and Barington reached a truce in April that added the fund as a particular advisor to the corporate. The settlement additionally added board members Anne Sheehan, chair of the Securities and Change Fee’s investor advisory committee, and Sarah Nash, CEO of Novagard Options.
The cope with Barington allowed Wexner to stay on the board, regardless of Barington’s unique rivalry the twin position of CEO and chairman gave him an excessive amount of energy.
L Manufacturers has explored a number of choices that might maintain Wexner in energy, an individual acquainted with the matter stated, cautioning these explorations could not end in a deal.
They embody a spin-off of Victoria’s Secret model, which has confronted slowing gross sales as buyers have shunned its horny merchandise that some view as exclusionary, an image the retailer is trying to overcome. Bathtub & Physique Works, alternatively, has continued to carry out strongly, boosted partly by its worthwhile candle enterprise.
L Manufacturers has additionally explored an funding referred to as “non-public funding in public fairness” with monetary traders, the particular person stated. Such a deal would assist L Manufacturers pay down its debt, which stood at $8.6 billion as of July 2019, in response to FactSet.
It might even be a vote of confidence in Wexner’s management, regardless of the mounting challenges he faces.
L Manufacturers declined to remark.