In a letter sent on Tuesday, significant investors in Victoria’s Secret urged the struggling lingerie brand to revamp its board of directors, criticizing the current chairman for having an “outdated perspective” and being “over-tenured.”
BBRC International, which holds nearly 13% of Victoria’s Secret, is pushing for the removal of longtime chairman Donna James and wants to secure a board seat for its founder, Brett Brandi, an Australian billionaire. The private equity firm began acquiring shares in 2022 and has been advocating for changes since last year, as outlined in the letter to board members.
Brandi expressed in the letter that, given the board’s failure to reconsider its strategies and show a commitment to good governance, BBRC is prepared to replace directors at the next annual general meeting, or potentially sooner. He stated that James is an “over-tenured” director lacking objectivity about the company’s operations.
Victoria’s Secret has yet to respond to requests for comment.
After being spun off from L Brands, which rebranded to Bath & Body Works in 2021, Victoria’s Secret has seen its stock drop approximately 15%, with its market cap falling below $3 billion. The shift from the brand’s traditionally sexy product line to more comfortable options hasn’t resonated well with customers, especially amid fierce competition from brands like Rihanna’s Savage X Fenty and Kim Kardashian’s Skims.
Earlier this year, the company faced a disruption when a cyber attack took its website offline for three days. In June, activist investor Barrington Capital Group acquired a stake in the company, advocating for a boardroom overhaul.
Tuesday’s letter marks a novel move for Brandi’s firm, which has not previously spearheaded an activist campaign. On that day, the company’s shares dropped by 0.4%.
BBRC has invested around $3 billion in retailers globally and has partnered with brands like luxury lingerie company Honey Birdette. However, Victoria’s Secret has accused BBRC of increasing its stake without making the necessary antitrust filings and introduced a shareholder rights plan to prevent any takeover attempts.
In the meantime, Hilary Super took over as the new CEO of Victoria’s Secret last fall after briefly leading Savage X Fenty and Anthropologie, which shares a parent company with Urban Outfitters. She has been focusing on revitalizing the brand by reimagining the lingerie show and introducing more comfortable products, like double push-up bras and fabric-covered underwire bras.
Her predecessor, Martin Waters, had dialed back the brand’s sex appeal in 2019 amid demands for greater body diversity and positivity. The once-popular fashion shows were canceled, and although the introduction of comfort-oriented items like bralettes initially boosted sales, growth eventually stalled.
Super noted that the previous decision to shift focus was made out of fear, admitting it was a mistake.
Chairman James has a long history, having served on L Brands’ board for nearly two decades.
