The Decline and Fall of Victoria’s Secret Titan Les Wexner

As 47 models strutted down the catwalk at the Victoria’s Secret fashion show in New York, billionaire Les Wexner was flying high.

It was 2015 and his L Brands Inc. — which started with a single shop in Ohio five decades earlier — had just soared to a record market value of $29 billion, driven by a lingerie empire and Fantasy Bra vision of female beauty.

Back in Columbus, his name atop the Wexner Medical Center towered over the city. A few blocks east, Picassos lined the walls of his namesake art gallery. A short drive north was New Albany, the town he more or less built single-handedly.

Then the bottom began to fall out.

Changing consumer sentiments hammered his kingdom and lopped more than $20 billion off its market value, fueled by MeToo-driven criticism of Victoria’s Secret’s hyper-sexualized image. And the 82-year-old Wexner’sties to sex offender Jeffrey Epstein, who for years served as his money manager, clouded his image as a beloved community man and philanthropist.

On Thursday, L Brands announced that it will be chopped up. Bath & Body Works will be turned into a standalone public company. Victoria’s Secret, the crown jewel that for decades defined the women’s lingerie segment but now is increasingly at odds with the definition of beauty, will be sold to private equity firmSycamore Partners, with L Brands keeping a minority stake.

The sale will end one of the most remarkable runs in American retail history. No person has led a major U.S. company longer than Wexner, who founded L Brands in 1963 with a $5,000 loan from his aunt. Over almost six decades, he built it into a retail and fashion giant through a series of acquisitions, ranging from plus-size specialist Lane Bryant to the exclusive Henri Bendel.

But it became a victim of shifting tastes, the relentless reinvention of retailing and, not least, scandal, sexism and worse inside the Wexner kingdom.

“He’s truly a legend in the world of retail,” said John D. Morris, a senior brand apparel analyst at D.A. Davidson who grew up in Columbus. “You look at the challenges he’s running into with the businesses, but let’s look back at what he’s done.”

Losing Ground

The deal to take Victoria’s Secret out of the glare of public markets follows a plan laid out by the parent company in September for a turnaround of the brand, which brought in more than half of the firm’s revenue in recent years. At the heart of the plan, executives said, was a revamp of the marketing to be more inclusive.

Distancing Victoria’s Secret from the push-up bra aesthetic it projected for many years won’t be easy.

The brand, which was little more than a nascent mail-order firm with just a few stores when Wexner bought it in 1982 for $1 million, has lost ground to rivals whose products are sold as more comfortable and body-positive. Dwindling traffic in American malls also has hurt sales.

And Victoria’s Secret has struggled to fend off criticism over the image fueled by its fashion shows and catalogs. This month, the New York Times chronicled misogyny, bullying and harassment among its models, cultivated by a senior executive who was close with Wexner.

The annual fashion show was canceled last year.

“Modern-day retail looks very different than 20th century retail,” said Simeon Siegel, an analyst at BMO Capital Markets.

Meeting Epstein

Born in Dayton, Ohio, Wexner started working in his parents’ clothing store and eventually struck out on his own. With the loan from his aunt, he founded The Limited in 1963 and opened his first store in a Columbus suburb.

The company evolved to become one of several specialty retail chains that took hold in malls across the country over the following years, and Wexner proved a prescient acquirer of brands, includingAbercrombie & Fitch and Lane Bryant.

L Brands went public in 1969 and Wexner was a billionaire by the 1980s, a person familiar with his finances has said. A self-proclaimed workhorse, Wexner preferred to focus on his job rather than managing his money, according to people who knew him at the time.

Then Epstein showed up.

The former math teacher and Bear Stearns Cos. banker became a central figure in the billionaire’s life. The pair met in the late 1980s in Palm Beach, Florida, when Epstein was hustling for clients of his money-management firm that he said catered only to billionaires. The New Yorker and Wexner, one of the nation’s richest people at the time, struck up a friendship that seemed odd to some who were close to the fashion mogul.

Wexner soon abandoned the money manager he had been working with. In 1991, he gave Epstein power of attorney. He explained in a letter to his philanthropic foundation in August — days before Epstein hanged himself in his Manhattan jail cell — that the financier previously had “wide latitude to act on my behalf with respect to my personal finances.”

‘Good Decisions’

One of Epstein’s roles was to manage Wexner’s soaring stock holdings, but his duties also included suburban planning and yacht design. He represented Wexner when the billionaire sold a New York townhouse to the German government in 1991, according to Jessica Rohm, a retired real estate agent. Epstein was the beneficiary of hand-me-downs including a Boeing 727 and another Manhattan mansion on East 71st Street.

“He votes the shares. I decide when to sell it,” Epstein said in a 2003 interview at his private Caribbean island. “If you take a look back you’ll see I’ve made very good decisions.”

Wexner has a $7 billion fortune, according to theBloomberg Billionaires Index. Less than a fifth of that is tied up in L Brands, thanks in part to the share sales Epstein oversaw. The mandate proved enormously profitable for him. Epstein’s Financial Trust Co. collected $208 million in fee income from 2003 through 2006, according to accounts first obtained by the New York Times.

The filings indicate that Wexner was his central — perhaps only — backer in those years. When the two cut ties in 2007, fee income at Financial Trust fell to $4 million that year from $66 million in 2006.

Twelve years later, in July 2019, those ties sparked a crisis for Wexner after Epstein was arrested and charged with sex trafficking. After weeks of silence, Wexner disavowed the convicted pedophile, who had served time on other charges in Florida a decade earlier, noting his former money manager had “misappropriated vast sums of money from me and my family.” Days later, Epstein was dead.

What’s next for Wexner is unclear. A major philanthropist, his money has flowed to the arts, military veterans, Jewish organizations and more. He donated $100 million to help expand the medical center on the campus of Ohio State University. Members of the school’s football team –- the pride of Columbus –- work out in an athletic complex that bears the Wexner name.

He will be chairman emeritus of what remains of L Brands.

“Limited Brands is truly living up to its name at this point — it really is limited,” D.A. Davidson’s Morris said. “Maybe they should change it to the singular — Limited Brand.”

— With assistance by Jordyn Holman

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