Victoria's Secret Needs a Different Kind of Angel
But what Victoria's Secret really needs is a different kind of angel: a buyer. Ideally, one that can offer a decent bid premium to long-suffering shareholders and enable the company to do the hard work needed to adapt to a new lingerie landscape, away from the glare of quarterly earnings. The agitators and the retailer should stop trading barbs, and instead work together to deliver value to all investors.
If Victoria's Secret puts itself up for sale, the activists could facilitate a take-private by joining forces with the bidder or backing its offer.
Both Barington Capital, which holds more than 1% of the retailer, and BBRC International Pte, which has acquired a 12.9% stake, are urging Victoria's Secret to make changes to its board and strategy to address the underperformance of its shares. They have a point. Since the company was spun out of L Brands Inc. four years ago, the stock has lost more than half of its value.
For years, Victoria's Secret led the underwear market. But amid the #MeToo era, the company looked increasingly male-dominated and out of touch. The scandal sparked by the association of former L Brands' Chairman and Chief Executive Officer Leslie Wexner with the disgraced late financier Jeffrey Epstein only hurt the brand further. As it prepared for life as a separately listed company, Victoria's Secret replaced the angels with a group of women recognized for their accomplishments and opinions. But the VS Collective, as it was known, failed to turbo-charge sales and was quietly disbanded.
Last fall, under new CEO Hillary Super, the company staged an updated version of its fashion show, an annual marketing extravaganza that was once a cultural force. It was a step in the right direction. But Victoria's Secret is still struggling to find its place in a market populated by nimbler rivals, such as Kim Kardashian's Skims and Rihanna's Savage X Fenty, which Super previously led.
Victoria's Secret needs to find a modern version of sexy, one that embraces different body sizes, but also changing underwear tastes. This includes the shift away from underwire bras to softer bralettes and sports bras, which have moved out of the gym into the everyday wardrobe.
There are some encouraging signs. For example, Victoria's Secret has been dressing pop superstar of the moment Sabrina Carpenter. Amid a return to offices and anxiety about the job market, more formal clothing that requires structured undergarments is making a comeback. And the retailer remains the biggest underwear retailer not just in the US but also globally, notes Mary Ross Gilbert, an analyst at Bloomberg Intelligence. The core brand — as well as sister line Pink — both have huge recognition, including with Gen-Z consumers, while other mall brands of yesteryear, such as Gap Inc., are proving it's possible to ride a wave of nostalgia to improved sales.
But making the most of this potential — the company should go further in updating its image and stores, and foster closer ties with Carpenter — requires significant investment. With President Donald Trump's tariffs, which will cost the company $50 million this year, and growing pressure on US consumers, committing to an overhaul spells short-term financial pain.
Victoria's Secret has introduced a so-called shareholder rights plan, a poison pill designed to stop an investor building a controlling stake without paying a premium. But it does not preclude the company considering an offer.
Nor is Victoria's Secret too big a morsel to tempt a buyer. The company's market value has shrunk to about $1.5 billion. The 30% premium that is the standard in takeover deals would value the company's equity at about $2 billion. But given how far the shares have sunk, a 50% premium looks more appropriate. Add in expected net debt excluding lease liabilities of $600 million at the end this fiscal year, and the enterprise value would still be under $3 billion — not out of reach for many private equity groups.
Assuming a successful repositioning lifts sales in the core underwear business, alongside progress with beauty, Pink, and relaunched swimwear and activewear units, the company could eventually be relisted at a higher valuation.
Indeed, there is a precedent for how this could play out: Breitling AG. Like Victoria's Secret, the Swiss watchmaker had a lot of baggage, thanks to its sexist marketing. But since a majority stake was acquired by CVC Capital Partners in 2017, it has ditched the tasteless ads and introduced a suite of revamped products. It's paying off: Breitling's 2024 revenue is estimated at about 820 million Swiss francs ($1.02 billion), roughly double its 2016 sales. The company's valuation has soared from 800 million francs in 2017 to 4.2 billion in 2022, when CVC sold a majority stake in the watchmaker. Of course, the luxury market has slumped since then, but if the new owner of Victoria's Secret could stage a similar reinvention, it would be looking at healthy returns.
Putting yourself up for sale can be seen as a sign of weakness. But some private equity buyers won't come knocking without the encouragement of an open door. And a deal to go private, which pays shareholders some of the recovery value in a takeover premium, looks like the best outcome. Its time for Victoria's Secret to pivot from selling lingerie to selling a lingerie company.
Elsewhere in Bloomberg Opinion:
This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Andrea Felsted is a Bloomberg Opinion columnist covering consumer goods and the retail industry. Previously, she was a reporter for the Financial Times.
More stories like this are available on bloomberg.com/opinion
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
a day ago
- Mint
Is the AI Winter Finally Upon Us?
(Bloomberg Opinion) -- I wrote at the beginning of the year that Wall Street investors should brace for an 'AI winter' in 2025; not necessarily a slowdown in investment, and certainly not in hype from the companies, but in tangible progress. Patience would be tested. Some recent events warrant revisiting the question: Is the AI winter upon us? GPT-5, the long-awaited new model from Sam Altman's OpenAI, was released earlier this month to a tepid reception. If it's a step toward artificial general intelligence, as the company repeatedly said it would be, it's a tiny one indeed. The model was so poorly received by some ChatGPT die-hards that the company was forced into an embarrassing rollback, making older models available again. Altman's claim that GPT-5 was like talking to a 'PhD-level' expert quickly became a the same time, CoreWeave Inc., one of the few pure-play AI stocks, plummeted more than 25% last week after guidance that spooked investors: Revenue growth is expected to be enormously outpaced by capital expenditure increases. (And the IPO lockup was coming to an end, which didn't help either.) And while it's hard to pin down just how beneficial AI has been, or will be, in the business world, one piece of research from McKinsey & Company should give everyone pause. While eight of out 10 companies surveyed said they were implementing generative AI in their business, the consultancy group observed, just as many said there had been 'no significant bottom-line impact.' The reaction to GPT-5 in particular has longtime AI skeptics taking a victory lap. One of the most prominent, the scientist Gary Marcus, reveled in GPT-5's apparent comeuppance. 'By rights, Altman's reputation should by now be completely burned,' he wrote alongside a laundry list of seemingly trivial tasks that GPT-5 failed to perform adequately. Author and journalist Brian Merchant noted that Altman seemed less willing to use the phrase 'artificial general intelligence' now that his latest AI still very much isn't that. 'I think it's not a super useful term,' Altman told CNBC. Merchant pointed out that it's a term Altman has used often, including in February on his personal blog. It's been handy in raising billions of dollars. Altman has had some other telling things to say over the past few days. 'Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes,' he told a group of reporters last week. 'You should expect OpenAI to spend trillions of dollars,' was another remark. My favorite, from a CNBC interview the week before, was: 'It's nice not to be public.' I'll bet! Throughout this I've been wondering how investors would have reacted to GPT-5 had OpenAI been a publicly traded company. I suspect at the very least OpenAI would have had a CoreWeave-like week once investors considered the user revolt, the backtrack-of-sorts on superintelligence, and the prediction that 'trillions' of more dollars would be needed. (Altman said he was confident the company could invent a 'new kind of financial instrument for finance and compute' to fund its rapid industrial expansion. I guess we now know at least one book in the GPT-5 training data.) Then again, the fallout hasn't extended to other stocks tied closely to OpenAI's fortunes, such as Microsoft Corp. or Nvidia Corp. This suggests investor nerves haven't been frayed. That could be attributed to some kinder analysis out there. One argument is that the embarrassing viral failings, such as not being able to spell 'blueberry,' are trivial stunts that miss the bigger picture: GPT-5 is more sophisticated in picking the appropriate model for a task, which, though it seems unremarkable, is actually practical and useful. Another view is that capabilities have improved sufficiently that groundbreaking AI agents that can go off and carry out certain tasks are just in reach — and the return on investment will kick in at that point. Or it may not, and this month will be seen as the beginning of something significant. I don't quite think we can call it an AI winter, yet — but there's no questioning the sudden chill in the air. My takeaway from the GPT-5 launch has been that while AI companies can tout overall performance on various benchmarks, these are becoming increasingly less relevant. Impenetrable to anyone other than AI researchers, these scores mean little to the end user, be it the consumer or the CEO. What sets the narrative around AI progress (or lack of) is practical application, and it's here where all AI companies are still falling short. GPT-3.5 was around for months before the demonstration of ChatGPT wowed the world — until we all discovered its many shortcomings, not through lab testing of millions of queries but with our own eyes. AI agents might be the next ChatGPT moment, if they do as promised. Call it the 'Blueberry Benchmark' of real-world usefulness. Better scores are needed urgently, or investors could be in for a frigid time. More From Bloomberg Opinion: This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Dave Lee is Bloomberg Opinion's US technology columnist. He was previously a correspondent for the Financial Times and BBC News.
Business Standard
09-08-2025
- Business Standard
Brigade Group announces onboarding of Victoria's Secret store at Orion Mall, Brigade Gateway, Bengaluru
Victoria's Secret, the leading specialty retailer of intimate apparel and beauty products including modern, fashion-inspired collections, fine fragrances, body care and loungewear has opened its newest store in Bengaluru, at Orion Mall at Brigade Gateway, Rajajinagar. The store located on the ground floor of the mall and spread across 4950 sqt ft will offer Victoria's Secret's signature undergarments, sport collection and sleepwear across a multitude of collections. Shoppers can also select from Victoria's Secret accessories as well as beauty products, featuring their popular fine fragrances, scents, lotions and mists. Commenting on the launch, Sunil Munshi, COO, Retail - Brigade Group, said, Victoria's Secret brings a unique blend of elegance, innovation, and aspiration, redefining fashion retail in Bengaluru. We're proud to introduce a concept store that delivers on global appeal while remaining sensitive to the tastes of modern Indian shoppers. The onboarding of Victoria's Secret at Orion Mall at Brigade Gateway marks a pivotal step in our strategic growth journey, while reinforcing Brigade Group's commitment to continually provide our consumers with globally iconic brands that resonate deeply with them. With the opening of Victoria's Secret's store at Orion Mall, we are proud to introduce the brand's complete offerings for customers to explore and shop. We look forward to showcasing the brand's depth of assortment, while offering an elevated customer experience. - Tushar Ved, President of Apparel Group India
Mint
09-08-2025
- Mint
Portrait of an Accidental Art Collector
(Bloomberg Opinion) -- I once entered the Manhattan apartment of a cantankerous, retired investment banker and almost walked into his Willem de Kooning. That would have been extremely unfortunate. I don't know what he paid for that human-height painting, but one piece by the Dutch-American artist (who died in 1997) was purchased for a reported $300 million(1) in 2015, a couple of years after my near run-in. The ex-financier showcased his lavish art collection — including, if memory serves, another de Kooning — in a sprawling apartment, which was oddly dim because of sallow lighting. All that hoard did not glitter. I don't aspire to the life of an art collector — and certainly not one dealing with altitudinous sums of money. I like art, but I'm just a dabbler popping in and out of museums and galleries to admire and attempt to keep current. I wish I could be artsy for art's sake, but the whirl — and lingo — can be bewildering. I've only just become aware that a huge and expensive mania for a generation of younger artists has come and gone. That speculative period is now called 'zombie formalism' because the paintings evoked the style of deceased modern masters without incremental inspiration. I'm fascinated but afraid to bring up the zombie apocalypse. It's so last decade. Recently, there's been a patter on the sidelines of my news feed about galleries closing. Being the uncle of a couple of art school grads, I figured that isn't a good thing. How would they get their works into the world if the gallery system collapsed? Who'd introduce them to appreciative buyers and help them navigate the treacherous business? How would the world know they'd 'arrived' if there weren't prestigious showrooms to bestow that glory? Still, it didn't strike me as particularly surprising that the industry was in a bad way. The market has crashed a number of times this century; most recently, after the financial meltdown and during the pandemic. According to the latest Art Basel & UBS Art Market Report, sales plummeted by 12% last year to $57.5 billion. The high end — involving objects at seven figures and up — was particularly badly hit. Are discounted de Koonings now a thing? All that said, I've wandered back into the art world. In my perpetual pursuit of good food, I was at Rene Redzepi's Noma in Copenhagen in May and I was captivated by the lively paintings at the restaurant entrance. The same style was echoed in ceramic pieces within. As it turned out, I'd met the artist Jenny Sharaf at the wedding of mutual friends in Mexico City, but I'd never seen her work before. Sharaf was born in Los Angeles and lives in San Francisco, but — like me — she loves the Danish capital and was there for an extended stint, long enough to paint several panels. I loved them for the color and energy and how kaleidoscopic they could be — the image shifting with the angle at which you approached it. And, better yet, I could afford them. However, more numbers were involved and they threw me. Calculating the costs of shipping the one I liked most to London plus insurance and the confusion over post-Brexit tariffs put me off sealing the deal. With US tariffs (and potential counter-tariffs) in the air, I didn't want to consider the alternative: sending any of her paintings over from America. It's a problem for the arts and antiques establishment as well: The arithmetic is antithetical to sales strategies and bottom lines. Who knows what those big beautiful duties might do? As the UBS report notes: 'Economic nationalism chips away at the foundations of economic growth. Tariffs worsen inflation and can threaten job security. Restrictions on capital flows can limit investment and may hit higher-income groups, which are more global in their behavior, disproportionately.' So I suggested to the artist, if you get a chance to come to London, why don't you create a painting for me using my apartment as a studio? In late July she did just that. It dovetailed, she said, with the way she was approaching her career, dealing directly with customers. 'Artists shouldn't hold back from forming relationships with collaborators and collectors.' She has several patrons, but she'd never painted for them in their own homes before. For me, the process has been exhilarating. We discussed the artists influencing her direction on the project. As a hopeless dilettante, I appreciate being able to point to my art and name-drop Cy Twombly, Joan Mitchell, Lee Ufan, Hans Hoffman, Philip Guston, Ad Reinhardt and Gunter Forg. After helping shop for supplies, I set her up in my flat so she could create directly in the space where the art would reside. We figured out which wall in my apartment would potentially be the best for display. As she progressed, she gauged my reaction to what was on the canvas. 'I like the drippy bits,' I said. And, lo, more drippy bits appeared. I won't quite say I was Pope Julius and Sharaf was Michelangelo — she didn't paint my ceiling — but I love what she produced after three sessions. In fact, I now have two Sharafs because her inspiration overflowed into a smaller piece. My London flat now has metaphysical super-dimensions — intimations of Denmark and California with a resident-patron's smiling presence in the beautiful blobs of paint. It's art for my sake. And it's fun. As the UBS report says: 'The trend in consumer spending has recently skewed away from goods toward having fun.' Maybe fun is just what an art world in the doldrums needs. And if you visit, you don't have to worry about barging into them. They're safely away from the front door. More From Bloomberg Opinion: (1) De Kooning originally sold the painting for $4,000 in 1955. It may sound like a steal but, after 70 years of inflation, that's more than $47,000 today. This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Howard Chua-Eoan is a columnist for Bloomberg Opinion covering culture and business. He previously served as Bloomberg Opinion's international editor and is a former news director at Time magazine. More stories like this are available on
