Victoria's Secret faces fresh activist fight from Barington Capital, source says
The New York-based hedge fund, which owns more than 1% of the company, believes Victoria's Secret has underperformed its competitors and lost value since its spin-off from former parent company L Brands in 2021, the person said, asking not to be identified because the matter is private.
Amid waning demand for its intimate apparel, Victoria's Secret shares have dropped by about 55% this year, and its current market value is about $1.45 billion.
The Wall Street Journal reported Barington's plans earlier on Sunday. A Victoria's Secret spokesperson said that Barington has not contacted the company, but it looks forward to "discussing their views with them."
"We are confident that executing our strategy under the new and experienced leadership team will continue to unlock value for our shareholders," the spokesperson said.
Barington wants the company to replace most or all of its board and end the "poison pill" plan that it adopted in May to protect it from hostile takeovers. It also believes the retailer should focus on core brands and initiatives, like bras and the Angels campaign, and accelerate growth in digital and international markets, the source said.
Barington believes the company's Chief Executive Hillary Super, who took over in September 2024, has limited public company experience, and that the rest of the board lacks the necessary experience to revitalize the iconic brand, the person said. Super was previously the CEO of intimates brand Savage X Fenty.
The fund also sees value in the Victoria's Secret beauty business, which it believes could be worth as much as the company's market value.
Victoria's Secret adopted the poison pill plan to fend off investment firm BBRC International Private Limited, which increased its stake in the company to around 13%.
Barington is also an investor in Macy's and Hanesbrands.
Founded by James Mitarotonda, Barington previously pushed for changes at L Brands, which split into Victoria's Secret and Bath & Body Works. At Macy's, the firm wanted the department store to create a real estate unit and cut costs to boost the share price.
Earlier this year, Barington mounted its first full-blown board room challenge since 2015 when it tried to put three directors on the board of casket maker Matthews International but ended up losing the vote.
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