Leslie Wexner, the billionaire founder of L Brands, the parent company of Victoria's Secret, is in talks to step down as CEO, according to The Wall Street Journal. He also is exploring strategic alternatives for the Victoria's Secret brand, the newspaper said, citing people close to the matter.
L Brands shares jumped 13% on Wednesday after the report.
The company is aiming to reach a decision on the potential sale and decide succession plans in coming weeks, the report said.
CNBC reported in November the company was exploring a spinoff of the Victoria's Secret brand or a "private investment in public equity" to help pay down the company's debt. At the time, it was exploring such deals with a structure that would keep Wexner in place. The 82-year-old Wexner's extensive history with accused sex trafficker Jeffrey Epstein made some investors wary of such a deal, a person familiar with the situation at the time.
Meantime, activist fund Barington Capital Group last year took a stake in L Brands and criticized the company's performance and questioned the independence of its board. L Brands and Barington later reached a truce that added the fund as a special advisor to the company. The agreement also added board members Anne Sheehan, chair of the Securities and Exchange Commission's investor advisory committee, and Sarah Nash, CEO of Novagard Solutions. The deal with Barington allowed Wexner to remain on the board, despite Barington's original contention the dual role of CEO and chairman gave him too much power.
The fallout from Wexner's relationship with Epstein has continued to haunt the company. Wexner gave Epstein power of attorney and Epstein was even a trustee of the Wexner Foundation. L Brands hired outside counsel to examine the relationship between the two men in July. In a letter to the foundation in August, Wexner said Epstein had misappropriated more than $46 million from Wexner and his family years ago but did not provide documents to federal prosecutors about the missing money until last August.
L Brands posted mixed results in the third quarter as declining Victoria's Secret sales continued to drag down the company's performance. Sales at Victoria's Secret stores open at least a year fell 7% in the third quarter — a jump from the 2% decline they saw in the same quarter last year.
Victoria's Secret sales have declined as women are gravitating toward lingerie brands like Adore Me, ThirdLove and American Eagle's Aerie, which are seen as more inclusive.
L Brands declined to comment on whether Wexner is stepping down and a message left with Barington Capital was not immediately returned.