Victoria's Secret, Bath & Body Works officially part ways

Dive Brief:

The last vestiges of Les Wexner's "Limited" conglomerate were swept away on Tuesday as L Brands officially switched its name to Bath & Body Works and began trading on the stock market under the symbol BBWI, apart from Victoria's Secret.
Renamed Victoria's Secret & Co., its ex-sibling includes Victoria's Secret Lingerie, Pink and Victoria's Secret Beauty and is now trading under VSCO, according to a Bath & Body Works press release.
The official split comes as Victoria's Secret's U.K. business, which filed for bankruptcy there last year, is liquidating its brick-and-mortar operations, according to several news reports. Last year L Brands partnered with U.K. apparel retailer Next in the struggling business. Emails to Victoria's Secret & Co., Next and U.K. bankruptcy consultancy Teneo were not immediately returned.

Dive Insight:

Wexner's empire may now be but a memory as its two remaining brands part ways, both of them without any leadership from Wexner himself, who left the company last year and its board this year.

The Limited launched nearly 60 years ago as a store in Columbus, Ohio, that, propelled by Wexner's merchandising and marketing savvy, grew into a sprawling conglomerate of mostly apparel brands. As decades passed, most of those businesses dropped off one by one, sold off or shuttered, as apparel growth ebbed. All but Victoria's Secret, which has remained a leader in the lingerie market — although in recent years its slowness to evolve as culture and tastes changed enabled competitors to steadily eat away at its share.

That has forced a reckoning that has included a mea culpa from CEO Martin Waters during the company's recent solo investor meeting and a 180-degree turn from its previous "glamazon" models and influencers.

Part of the rationale behind the split is that Bath & Body Works, which racks up sales in personal care and highly collectable candles and last year maintained a booming business during the pandemic, has been a growing business while Victoria's Secret's has not.

Morgan Stanley analysts noted that the lingerie brand's first day of trading reflected hesitation among investors around its prospects, but said they believe it has "a credible turnaround story" with mid-single digit revenue growth over the longer term. "Our view is supported by underlying industry growth trends, a global market share gain opportunity, international expansion, nascent category growth, 2020's meaningful cost rationalization initiatives, recent financial performance, and confidence in new management," according to an Aug. 3 client note.

Yet neither Victoria's Secret nor even Bath & Body Works are entirely free of Victoria's Secret's and L Brands' previous troubles. As of Friday, both companies are party to an agreement between L Brands and the Oregon Department of Justice "that commits $90 million of company funds to (1) protect employees from harassment and discrimination and (2) require accountability from executives when misconduct occurs." The settlement "also releases former employees from non-disclosure agreements (NDAs), allowing them now to speak publicly about their experiences," according to a press release Friday from Oregon Attorney General Ellen Rosenblum and Treasurer Tobias Read.

"The settlement is on behalf of the Oregon Public Employees Retirement Fund and other shareholders who alleged that L Brands' board of directors failed to investigate former CEO and Chairman Emeritus Leslie Wexner's close personal ties with pedophile Jeffrey Epstein, and ignored a widespread and pervasive culture of sexual harassment at the company," according to the release.