Latest news with #Barington
CNBC
21-06-2025
- Business
- CNBC
How activist Barington Capital can collaborate with Victoria's Secret to improve shareholder value
Business: Victoria's Secret & Co. is a specialty retailer of women's apparel and beauty products marketed under the Victoria's Secret, Pink and Adore Me brand names. Victoria's Secret brand offers intimate apparel, casual sleepwear, swim, lounge and sport, as well as fragrances and body care. Pink is a lifestyle brand for young women providing variety of collections and heritage pieces, including intimate apparel, loungewear, activewear, accessories, beauty and more. Adore Me is a direct-to-consumer lingerie and apparel brand that is focused on serving women of all sizes and budgets. Stock Market Value: $1.5B ($18.83 per share) Ownership: > 1% Average Cost: n/a Activist Commentary: Barington was founded in 1992 by James A. Mitarotonda as a boutique, full-service investment bank to serve the needs of emerging growth and smaller capitalization companies. The success of the firm and its investments led to the wind-down of the investment bank and the launch of an activist hedge fund in 2000. In its history, Barington has taken material action at 38 other companies and has averaged a 38.18% return on these investments versus 14.74% for the Russell 2000 over the same period. Barington is advocating for Victoria's Secret to (i) replace at least a majority, if not all, of the board with directors who have proven experience in brand revitalization, operational execution, international expansion and shareholder value creation (six of the nine current directors have been on the board since its public listing); (ii) have the reconstituted board consider whether CEO Hillary Super has the experience and strategic clarity necessary to engineer a turnaround; (iii) dedicate additional focus to its core brand; (iv) accelerate growth in digital and international markets; and (v) streamline the operating model eliminating underperforming and distracting initiatives. Victoria's Secret & Co. ("VSCO") is a specialty retailer of lingerie, clothing and beauty products through its flagship Victoria's Secret brand, Pink and Adore Me. The company began trading on the New York Stock Exchange in summer 2021 following a spin-off from L Brands (which is now Bath & Body Works). The company's nearly four-year stint in the public markets has been marked by difficulties. Trading at an all-time high of roughly $76 per share not long after its debut, shares have fallen more than 75% to around $18 per share. Investor BBRC International PTE Limited converted from a 13G to a 13D in February 2024 and built its position to nearly 13% as VSCO shares continued to tumble. Earlier this month, BBRC sent a letter to Victoria's Secret Chair Donna James in which it lambasted the board for its history of value destruction. BBRC's letter is short on support and detail and long on allegation, negativity and second guessing with the benefit of hindsight. The only suggestion the investor makes states the obvious: "constructing a confidence-inspiring Board and generating positive financial returns to drive value creation." Thankfully for Victoria's Secret and its shareholders, a more constructive and experienced activist showed up: Barington Capital. On June 16, Barington sent a letter to the board of VSCO notifying the company of its more than 1% position. Then in its very next paragraph, Barington uses words like "constructively," "collaboratively" and "helpful." The firm does not just claim to have industry experience, but cites its engagement with L Brands, the former parent company of VSCO, which led to an increase in the stock price by 221.5% during its tenure as an advisor to the board of directors. Like BBRC, Barington criticizes the company's dismal underperformance, trailing its peers by 47.4 percentage points since its IPO. But while BBRC was content with just being critical, Barington specifically identifies several reasons for the underperformance such as declining revenue, shrinking gross margins, growing inventory, high senior management turnover, a lack of marketing and merchandising focus and an apparent failure to articulate or execute a compelling brand vision. Had Barington just left it there, the firm would have been more helpful than BBRC. However, as a responsible and experienced shareholder activist, Barington takes it to the next integral step – suggestions on a path forward. Specifically, Barington recommended that Victoria's Secret: (i) replace at least a majority, if not all, of the board with directors who have proven experience in brand revitalization, operational execution, international expansion and shareholder value creation (six of the nine current directors have been on the board since its public listing); (ii) have the reconstituted board consider whether CEO Hillary Super has the experience and strategic clarity necessary to engineer a turnaround; (iii) dedicate additional focus to its core brand; (iv) accelerate growth in digital and international markets; and (v) streamline the operating model eliminating underperforming and distracting initiatives. Barington is no stranger to VSCO. In fact, the firm was a vocal proponent of the spin in a previous 2019 campaign at L Brands. At the time, Barington recommended that the company take swift action to improve the performance of VSCO by correcting merchandising mistakes and launching a strategic review to unlock value through a separation of VSCO from Bath & Body Works. The two parties eventually entered into an agreement pursuant to which L Brands appointed Barington as a special advisor to the company, and Barington agreed to withdraw its proposed nominees to the board. Ultimately, VSCO was spun and Barington generated a return of over 221.5% during its tenure as an advisor to the board. Barington may not be a household name in the investor world like many activists, but it has as much experience as any activist today. The firm's activism dates back to 2000, and much of it was focused on the retail sector, targeting companies like Hanesbrands, Chico's FAS and Dillard's. Of its 46 campaigns, 19 have been at consumer discretionary companies, at which the firm has had an average return of 13.86% versus 8.56% for the Russell 2000 over the same period. Barington does not like spending what it takes to win a proxy fight, preferring to gain representation through settlements. Its recent proxy fight and loss at Matthews International was evidence of this, but also showed that Barington is still willing to take a proxy fight to the distance. Barington is not likely to go through that again so soon, but given its experience in this industry and at Victoria's Secret (two of the current directors, including Chair Donna James, were directors when Barington successfully collaboratively engaged in 2019), we would expect that the firm would have a good opportunity to work constructively and amicably with the board to create shareholder value.
Express Tribune
17-06-2025
- Business
- Express Tribune
Investor demands Victoria's Secret overhaul its board
Activist investor Barington Capital Group is pushing Victoria's Secret to alter its board and end a recently adopted "poison pill" plan, according to a letter to the lingerie maker's shareholders on Monday. The New York-based hedge fund, which owns more than 1 per cent of the company, said Victoria's Secret has underperformed its competitors and lost over $2.4 billion in shareholder value since its spin-off in 2021 from former parent company L Brands. On Sunday, Reuters reported, citing sources, that 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 the company from hostile takeovers. "Barington has not sought to engage with us, but we look forward to discussing their views with them," a Victoria's Secret spokesperson said. "We are confident that executing our strategy under the new and experienced leadership team will continue to unlock value for our shareholders," the spokesperson added. Its shares, which have lost more than half of their value so far this year amid waning demand, were up about 3 per cent in morning trade. Victoria's Secret requires a reconstituted board comprising directors with "proven experience in brand revitalisation, operational execution, international expansion, and shareholder value creation," James Mitarotonda, Barington's founder and CEO, said in the letter. The investment firm said the retailer should focus on core categories and initiatives, like bras and the Angels campaign, and accelerate growth in digital and international markets. Barington highlighted concerns about the company's leadership, and said 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 revitalise the iconic brand. Victoria's Secret, with a market capitalisation of about $1.45 billion currently, adopted the poison pill plan to fend off Brett Blundy's investment firm, which increased its stake in the company to around 13 per cent. Barington's pressure puts Victoria's Secret in a "precarious position" as it tries to fend off other activist investors and restore confidence in CEO's turnaround plan, eMarketer analyst Rachel Wolff said, adding that investors' growing dissatisfaction with leadership could force a change at the company's management level. Barington previously pushed for changes at L Brands, which split into Victoria's Secret and Bath & Body Works. Earlier this year, Barington mounted its first full-blown boardroom challenge since 2015 when it tried to put three directors on the board of casket maker Matthews International but ended up losing the vote.
Yahoo
17-06-2025
- Business
- Yahoo
Barington urges Victoria's Secret to overhaul leadership board
Investor group Barington insists on the appointment of Victoria's Secret board members who possess expertise in rejuvenating brands, operational efficiency, global market growth, and boosting shareholder returns. Barington also describes Victoria's Secret's shareholder rights plan as a "poison pill" and argues it could discourage propositions that might otherwise increase the company's value. It believes it portrays a negative signal to the market. Barington has a stake of over 1% in the company's outstanding common shares and has criticised the brand's performance following its 2021 spin-off from L Brands. In a letter to Victoria's Secret & Co chairperson Donna James, Barington CEO James Mitarotonda claimed the existing board has overseen a "destruction of $2.4bn in shareholder value", while approving capital expenditures and acquisitions worth $1.8bn, which it says has 'little demonstrable return'. Mitarotonda has questioned the qualifications of current executives such as CEO Hillary Super, alleging they lack the essential experience and strategic insight for an effective recovery. He also questioned Super's decision to diversify into secondary and athleticwear lines rather than concentrating on the core business and global expansion. 'Her focus on re-launching secondary brands such as Pink and expanding into athleticwear, while failing to prioritise the company's core business and international growth, indicates to us a troubling lack of strategic focus. Moreover, internal rhetoric referring to senior leadership as a 'super squad' appears arrogant and unjustified given the company's declining performance,' the letter reads. The investor also calls for accountability from the board of directors, noting that six out of nine directors were part of the board during the period of decline. Plus, it claims two independent directors do not have sufficient experience in scaling global consumer brands. 'We believe that Victoria's Secret requires a reconstituted board comprised of directors with proven experience in brand revitalisation, operational execution, international expansion, and shareholder value creation,' Mitarotonda said. In its fiscal 2024 fourth-quarter report, Victoria's Secret showed operating income and earnings per share that surpassed expectations, along with a 5% increase in comparable sales. The company posted net sales of $2.10bn for Q4, slightly up from $2.08bn during the same period in the previous year. 1. Refocus on core brand strengths – Prioritise main product lines to rejuvenate the brand's essence through excellence, creativity, and a cohesive brand story. This involves reinstating strict merchandising rules, initiating dynamic and creative marketing initiatives, and where it makes sense, bringing back popular historical features like the renowned Angels campaign. 2. Propel expansion in digital and global arenas – These sectors have demonstrated potential but seem to have stalled. Renewed investment and clear strategic direction in these areas can release significant value. 3. Simplify the business structure – Remove initiatives that are not performing well or are causing distractions in order to regain focus and improve profitability. Victoria's Secret had not responded to Just Style's request for comment at the time of going to press. However, a Victoria's Secret spokesperson was quoted by Reuters as saying: "Barington has not sought to engage with us, but we look 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." In December of the previous year, Barington Capital Group together with Thor Equities advised Macy's to explore structural changes after a 2.4% drop in net sales for Q3. "Barington urges Victoria's Secret to overhaul leadership board" was originally created and published by Just Style, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Fashion Network
17-06-2025
- Business
- Fashion Network
Victoria's Secret faces fresh activist fight from Barington Capital
Activist investor Barington Capital Group is pushing Victoria's Secret to alter its board and end a recently adopted "poison pill" plan, according to a letter to the lingerie maker's shareholders on Monday. See catwalk The New York-based hedge fund, which owns more than 1% of the company, said Victoria's Secret has underperformed its competitors and lost over $2.4 billion in shareholder value since its spin-off in 2021 from former parent company L Brands. On Sunday, Reuters reported, citing sources, that 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 the company from hostile takeovers. "Barington has not sought to engage with us, but we look forward to discussing their views with them," a Victoria's Secret spokesperson said. "We are confident that executing our strategy under the new and experienced leadership team will continue to unlock value for our shareholders," the spokesperson added. Its shares, which have lost more than half of their value so far this year amid waning demand, were up about 3% in morning trade. Victoria's Secret requires a reconstituted board comprising directors with "proven experience in brand revitalization, operational execution, international expansion, and shareholder value creation," James Mitarotonda, Barington's founder and CEO, said in the letter. The investment firm said the retailer should focus on core categories and initiatives, like bras and the Angels campaign, and accelerate growth in digital and international markets. Barington highlighted concerns about the company's leadership, and said 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. Victoria's Secret, with a market capitalization of about $1.45 billion currently, adopted the poison pill plan to fend off Brett Blundy's investment firm, which increased its stake in the company to around 13%. Barington's pressure puts Victoria's Secret in a "precarious position" as it tries to fend off other activist investors and restore confidence in CEO's turnaround plan, eMarketer analyst Rachel Wolff said, adding that investors' growing dissatisfaction with leadership could force a change at the company's management level. Barington previously pushed for changes at L Brands, which split into Victoria's Secret and Bath & Body Works. 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.
Fashion Network
16-06-2025
- Business
- Fashion Network
Victoria's Secret faces fresh activist fight from Barington Capital
Activist investor Barington Capital Group is pushing Victoria's Secret to alter its board and end a recently adopted "poison pill" plan, according to a letter to the lingerie maker's shareholders on Monday. See catwalk The New York-based hedge fund, which owns more than 1% of the company, said Victoria's Secret has underperformed its competitors and lost over $2.4 billion in shareholder value since its spin-off in 2021 from former parent company L Brands. On Sunday, Reuters reported, citing sources, that 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 the company from hostile takeovers. "Barington has not sought to engage with us, but we look forward to discussing their views with them," a Victoria's Secret spokesperson said. "We are confident that executing our strategy under the new and experienced leadership team will continue to unlock value for our shareholders," the spokesperson added. Its shares, which have lost more than half of their value so far this year amid waning demand, were up about 3% in morning trade. Victoria's Secret requires a reconstituted board comprising directors with "proven experience in brand revitalization, operational execution, international expansion, and shareholder value creation," James Mitarotonda, Barington's founder and CEO, said in the letter. The investment firm said the retailer should focus on core categories and initiatives, like bras and the Angels campaign, and accelerate growth in digital and international markets. Barington highlighted concerns about the company's leadership, and said 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. Victoria's Secret, with a market capitalization of about $1.45 billion currently, adopted the poison pill plan to fend off Brett Blundy's investment firm, which increased its stake in the company to around 13%. Barington's pressure puts Victoria's Secret in a "precarious position" as it tries to fend off other activist investors and restore confidence in CEO's turnaround plan, eMarketer analyst Rachel Wolff said, adding that investors' growing dissatisfaction with leadership could force a change at the company's management level. Barington previously pushed for changes at L Brands, which split into Victoria's Secret and Bath & Body Works. 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.
