Investor Seeks Changes at Victoria’s Secret
Barrington Capital Group, an activist investor, is pushing for significant changes at Victoria’s Secret. Their main goals are to reshape the board and to eliminate a recently introduced shareholder rights plan.
James Mitarotonda, the CEO of the New York-based hedge fund, holds over 1% of Victoria’s Secret’s outstanding shares. In a letter to the company’s chair, Donna James, he expressed concerns that the board hasn’t acknowledged its challenges since separating from L Brands in 2021, claiming they have overseen losses amounting to $240 million.
Mitarotonda criticized the current leadership, including CEO Hillary Super, for lacking the necessary experience and strategy to turn things around effectively. He pointed out that Barrington itself has limited exposure to the supermarket sector and only a brief history in intimate apparel.
He also indicated that the company’s failure to earn employee trust reflects a lack of strategic focus, noting that it’s not prioritizing its core pink business or expanding internationally.
Interestingly, after the letter was made public, Victoria’s Secret shares saw a rise on Monday morning.
Barrington contended that six of the nine board members have been part of the board during the company’s downturn. The remaining two independent directors, he argued, have limited experience in growing a global consumer business.
“Victoria’s Secret needs a revamped board with proven expertise in revitalizing brands, operational execution, international growth, and increasing shareholder value,” he stated.
Meanwhile, other activist investors with stakes in Macy’s shared their disappointment over the company’s own recently adopted “poison” plan, viewing it as counterproductive.
In his letter, Mitarotonda raised concerns about the challenges faced by management and the board, claiming that significant changes are often justified. He referenced academic studies indicating that companies with weak governance structures tend to receive lower market valuations.
For Victoria’s Secret to rebound, Mitarotonda suggested focusing on core product categories like bras and reinvesting in digital and international markets.
In a final note, he mentioned that he had previously worked with L Brands, helping to drive initiatives that resulted in a 221.5% increase in the company’s share price during his time advising the board.
