L Brands, once a major retail empire, has undergone significant changes in recent years. Founded by Les Wexner, who served as CEO for over five decades, the company built a portfolio that included well-known brands like Victoria’s Secret and Bath & Body Works.
In August 2021, L Brands officially split into two independent, publicly traded companies: Victoria’s Secret and Bath & Body Works, Inc., effectively dissolving L Brands as it previously existed.
The separation marked the end of an era for what was once a retail powerhouse. The company formerly known as L Brands is now Bath & Body Works, Inc., while Victoria’s Secret operates as a completely separate entity. This strategic decision came after years of changing market dynamics and represents one of the biggest shifts in the retail landscape in recent memory.
Key Takeaways
- L Brands no longer exists in its original form, having split into separate Victoria’s Secret and Bath & Body Works companies in 2021.
- Les Wexner founded and led L Brands for more than 50 years before the company’s division.
- The separation created two independent, publicly traded companies with distinct business strategies and market positions.
Overview of L Brands
L Brands was a major American retail company known for its popular apparel and personal care brands before changing its structure in recent years. The company had a significant impact on the retail landscape with its various well-known store chains.
L Brands History
L Brands began with entrepreneur Leslie Wexner, who was born in Columbus, Ohio. In 1963, Wexner opened his first store called The Limited, focusing on women’s clothing. This single store grew into a retail empire.
Over the decades, the company expanded by developing and acquiring numerous brands. Before 2013, the company was known as Limited Brands, later simplifying to L Brands. This name change reflected its evolution beyond just The Limited stores.
The company became famous for creating distinctive shopping experiences. Under Wexner’s leadership, L Brands transformed mall shopping in America with its specialty store approach.
Current Brand Portfolio
L Brands has undergone significant changes to its portfolio in recent years. While it once owned many popular retail chains, the company has sold or spun off several of its major brands, including Victoria’s Secret, The Limited, and Express.
A major change came on August 3, 2021, when L Brands completed the separation of Victoria’s Secret into an independent, public company through a tax-free spin-off. This restructuring marked the end of L Brands as it was previously known.
The company’s focus shifted primarily to Bath & Body Works, which became its main remaining brand. After the Victoria’s Secret spin-off, L Brands actually renamed itself to Bath & Body Works, Inc., reflecting this new, more focused business structure.
Ownership Structure
L Brands, now known as Bath & Body Works, Inc., has evolved over time with significant changes in its ownership structure. The company’s shares are distributed among various stakeholders including institutional investors, public shareholders, and major corporations.
Public Shareholding
The public owns a portion of what was formerly L Brands. While individuals hold approximately 1.21% of the company’s shares, this represents a small fraction compared to institutional ownership.
Individual investors can purchase shares through standard stock market transactions. The company went through significant changes in recent years, including the separation of Victoria’s Secret from its portfolio.
Public shareholding offers everyday investors a chance to participate in the company’s growth and receive dividends when distributed.
Majority Shareholders
In a major restructuring move, Sycamore Partners became a significant stakeholder in part of the former L Brands empire. Under a key agreement, Sycamore Partners was set to gain a 55% controlling stake in Victoria’s Secret, while L Brands would maintain a 45% stake.
This arrangement marked a pivotal moment in the company’s history, effectively splitting the business. The deal was designed to allow Bath & Body Works to operate independently.
L Brands has transformed dramatically over time, having previously owned several major retail brands including Victoria’s Secret, The Limited, and Express, which it has subsequently divested.
Institutional Investors
Institutional investors dominate the ownership structure of the former L Brands, holding approximately 92% of all shares. This overwhelming majority demonstrates strong institutional confidence in the company.
Major institutional investors include:
- State Street Corp with a 3.58% stake
- Schweizerische Nationalbank holding 0.19%
- SEI Investments Co. with 0.19%
The substantial institutional ownership provides stability to the company while potentially influencing major corporate decisions. These large investors often have representation or influence on the board of directors.
Executive Leadership
L Brands, now known as Bath & Body Works, Inc., has undergone significant leadership changes in recent years. The company’s executive team and board have shifted as part of strategic reorganization.
Current CEO and CFO
Martin Waters became the CEO of Victoria’s Secret, replacing John Mehas who had served in that role since February 2019. This change marked an important leadership transition during a pivotal time for the brand.
According to company information, L Brands (now Bath & Body Works, Inc.) has approximately 59,950 employees with 34 people in leadership positions. The executive team guides the company’s overall strategy and operations.
When Leslie H. Wexner stepped down after his remarkable 57-year tenure, it represented a significant moment in company history. Wexner’s successor faced the challenge of building on established relationships while focusing on future impact.
Board of Directors
The L Brands Board of Directors has experienced notable changes. Francis A. Hondal and Danielle Lee were appointed to the board, bringing fresh perspectives to company governance.
A significant development occurred when Les and Abigail Wexner announced they would not stand for reelection to the board in May 2021. This decision marked the end of an era for the company’s governance structure.
Leslie Herbert Wexner, as co-founder and chairman emeritus of Bath & Body Works, had shaped the company’s direction for decades. Born September 8, 1937, Wexner built a retail empire that transformed American shopping malls.
The board continues to oversee strategic decisions while adapting to industry changes and consumer preferences in the competitive retail landscape.
Financial Performance
L Brands, now known as Bath & Body Works, Inc., has experienced notable financial shifts in recent years. The company’s performance has been marked by both challenges and successes, with significant changes following corporate restructuring.
Recent Earnings Reports
L Brands reported record fourth quarter results in 2020, showing impressive recovery from previous difficulties. The company achieved earnings per share of $3.00 for the year ended January 30, 2021, a dramatic improvement compared to a loss per share of $1.33 for the year ended February 1, 2020.
This financial turnaround came after a challenging 2019 when the company’s performance fell below expectations. During that period, growth at Bath & Body Works was offset by declines elsewhere in the company’s portfolio.
Bath & Body Works emerged as the stronger division within L Brands, consistently showing growth while other segments struggled. This pattern ultimately influenced major corporate decisions.
Stock Performance
The stock performance of L Brands has closely followed its corporate transformation journey. In 2021, the company made a significant change when its board approved the separation of Victoria’s Secret from the parent company.
This strategic decision included changing the company name from L Brands to Bath & Body Works, Inc. Along with this rebranding, the stock symbol changed from “LB” to “BBWI,” reflecting the company’s new identity focused on its better-performing division.
Previously, L Brands had considered a different arrangement with Sycamore Partners that would have given the private equity firm a 55% controlling stake in Victoria’s Secret while L Brands retained 45%, leaving Bath & Body Works as a standalone company.
Strategic Changes
L Brands underwent several major strategic shifts to adapt to changing retail landscapes and consumer preferences.
Divestitures and Acquisitions
L Brands made significant portfolio changes in recent years. The most notable was the decision to separate Bath & Body Works and Victoria’s Secret into two independent, publicly traded companies. This split was designed to allow each brand to focus on their unique growth strategies.
The separation plan was approved by the L Brands Board, with the company changing its name from L Brands to Bath & Body Works, Inc. The stock symbol also changed from “LB” to “BBWI” to reflect this new direction.
In leadership changes, Andrew Meslow continued as Chief Executive Officer following the spin-off, providing continuity during the transition period.
Market Expansion Strategies
L Brands focused on strengthening its core businesses while adapting to evolving consumer behaviors. Prior to the split, the company operated 2,920 company-owned specialty stores across its brands, showing its substantial retail footprint.
The company also refreshed its leadership team and Board of Directors to bring new perspectives. They appointed Francis A. Hondal and Danielle Lee to the Board while Les and Abigail Wexner stepped down, marking a significant governance shift.
The separation was completed in summer 2021, with both entities becoming independent public companies. This strategy allowed each brand to pursue specialized growth paths and more targeted market approaches.
Corporate Governance
L Brands has established robust governance structures that guide company operations. Key stakeholders include major investment firms that hold significant ownership stakes, while dedicated policies ensure ethical business practices.
Governance Policies
L Brands’ governance is headed by a Board of Directors that previously included Leslie H. Wexner, who served as both Chairman and Chief Executive Officer (CEO) of the company. The Board approved a name change from L Brands to Bath & Body Works, Inc., along with changing the stock symbol from “LB” to “BBWI” during the separation of Victoria’s Secret.
Major shareholders of L Brands include:
- Vanguard Fiduciary Trust Co. (13.02% ownership)
- BlackRock Advisors LLC (12.36% ownership)
- T. Rowe Price
The company also established a separate Board of Directors for Victoria’s Secret when it became a standalone company. This board includes members with expertise in corporate governance, with one member even serving as a founder of the Investor Stewardship Group.
Ethics and Compliance
L Brands demonstrates commitment to ethical business practices through comprehensive compliance programs. The company has implemented various measures to ensure proper conduct across all operational levels.
Following corporate settlements, L Brands agreed to adopt a suite of corporate governance and management measures, including maintaining a focus on diversity throughout the organization. This commitment reflects the company’s response to evolving expectations for corporate responsibility.
The ethics framework includes:
- Clear reporting structures
- Internal audit processes
- Whistleblower protections
These policies help ensure transparency and accountability within the company. Regular reviews of these compliance measures keep L Brands aligned with industry best practices and regulatory requirements.
Social Responsibility Initiatives
Victoria’s Secret & Co. has made several efforts to be stewards of the environment and improve their business practices. Their corporate responsibility approach includes Environmental, Social, and Governance (ESG) initiatives that aim to create positive impacts.
One notable initiative is their supplier diversity program. The company has taken specific steps to increase support for women-owned businesses through this initiative, reflecting their commitment to gender equality in their supply chain.
The brand also engages in Corporate Social Advocacy (CSA) through women empowerment initiatives. These programs aim to promote positive social change while aligning with the company’s values.
Key Social Responsibility Areas:
- Environmental stewardship
- Supplier diversity
- Women empowerment
- Ethical business practices
After the separation from L Brands (now Bath & Body Works, Inc.), Victoria’s Secret continues to maintain these social responsibility initiatives as an independent company.
Their approach combines business objectives with social impact, creating programs that benefit both the company and the communities they serve.
Legal and Regulatory Compliance
L Brands, Inc. (now known as Bath & Body Works, Inc.) has faced various legal challenges throughout its history. The company has had to navigate complex regulatory environments while maintaining compliance with securities laws and corporate governance standards.
In recent years, L Brands announced a settlement of stockholder derivative claims, showing their commitment to resolving legal disputes. These settlements apply to both Victoria’s Secret & Co. and Bath & Body Works, Inc.
As a holding company, L Brands’ most significant assets were the stock of its subsidiaries. The guarantors represented substantially all of the company’s assets, which carried important regulatory implications for investors and stakeholders.
The company undergoes regular SEC filings and maintains transparency in its operations. This includes detailed 10-K reports that outline business activities, risks, and financial performance.
Board governance has also been a key area of compliance focus. The company has made several changes to its Board of Directors to ensure proper oversight and corporate governance.
In 2021, the L Brands Board approved the separation of Victoria’s Secret and changed the parent company name to Bath & Body Works, Inc. This corporate restructuring required careful regulatory compliance to protect shareholder interests.
Upcoming Challenges and Opportunities
L Brands no longer exists as it once did. In 2021, the company split into two separate businesses – Victoria’s Secret and Bath & Body Works. This major change presents both challenges and opportunities for the newly independent companies.
Victoria’s Secret faces significant challenges in rebuilding its brand image. The company has been working on a major comeback plan to address years of declining sales and diminished relevance with women customers.
Both brands must navigate the changing retail landscape. The future of retail includes more digital shopping experiences and adapting to post-pandemic consumer behaviors.
There are financial opportunities too. During the separation process, L Brands actually rejected offers of more than $3 billion for Victoria’s Secret, believing it could be valued at up to $7 billion as an independent company.
Innovation remains a priority for both businesses. Prior to the split, L Brands had partnered with L Marks to create a Retail Innovation Discovery program to help ensure future success.
The brands must also address supply chain disruptions, sustainability concerns, and the growing competition from both online and brick-and-mortar retailers. Their ability to adapt to these challenges will determine their long-term success.
Conclusion
L Brands, once a powerful retail empire, has undergone significant changes in recent years. The company that previously owned multiple famous brands now exists in a different form.
After selling or spinning off various businesses, L Brands no longer exists under that name. In 2021, the company approved a split that separated its two main brands.
The retail giant has undergone a significant transformation. Its most famous brand, Victoria’s Secret, became an independent, publicly traded company. Bath & Body Works also became its own separate public entity.
The company formerly known as L Brands is now called Bath & Body Works, Inc. This marks the end of an era for what was once one of America’s largest specialty retail companies.
The transformation reflects broader changes in retail as companies adapt to new consumer preferences and shopping habits. What began as a single store has evolved through many acquisitions and divestitures over decades.
Today, the brands that were once part of the L Brands family continue to operate, but under different ownership structures and with independent business strategies.
