Victoria’s Secret's parent company falls after its CEO's ties with Jeffrey Epstein resurface
L Brands CEO Les Wexner has ties to Jeffrey Epstein, the financier charged with sex trafficking.
While Wexner cut ties with Epstein years ago and has not been accused of any wrongdoing, L Brands shares declined on news of the charge.
Victoria's Secret has struggled to stay relevant to consumers in the #MeToo era.
Shares of L Brands slid as much as 5% on Tuesday as reports of ties between its CEO and Jeffrey Epstein — the financier charged with sex trafficking — came to light.
Epstein was the money manager for L Brands CEO Les Wexner for years, and even bought his Manhattan mansion, Bloomberg reported on Monday. Court documents unsealed the same day revealed that federal prosecutors have charged Epstein with running a sex-trafficking operation. Wexner has not been accused of any wrongdoing.
Neither Wexner nor L Brands have spoken out about his prior connections with Epstein, with whom he has not been connected for more than a decade. Still, the ties between Epstein and Wexner are proving to be a drag on L Brands as it tries to reinvent its image to appeal to socially conscious consumers.
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L Brands is the parent company of Bath & Body Works and Pink, as well as Victoria's Secret. The conglomerate has struggled to maintain the popularity of its Victoria's Secret brand, which used to be the most famous lingerie retailer in the US. Sales have plummeted as customers have grown disenchanted with the brand. Analysts have also grown skeptical of the company's future in the #MeToo era.
It's taken its toll on the company. The lingerie company lost 9% of its market share in the US between 2015 and 2018. This year, Victoria's Secret has had said it will close 53 stores in North America, up from 30 store closings last year.
Pink, the brand focused on a younger demographic, has also struggled to keep its sales numbers afloat. Other brands such as American Eagle's Aerie have boosted their market share by being more inclusive and advocating for body-positivity. ThirdLove, another brand, has also become increasingly critical of Victoria's Secret.
Shares of L Brands are up roughly 4% year-to-date.
