NEW YORK, Nov 4, 2024 – BBRC International, holding nearly 13% of Victoria’s Secret (VSCO), is demanding board changes at the struggling lingerie retailer 1. The activist push adds pressure on a company already facing multiple investor challenges and declining performance.
Key Takeaways
- BBRC seeks removal of Chair Donna James
- Second major activist targeting Victoria’s Secret this year
- Company faces accusations of destroying shareholder value
Market reaction & context
Victoria’s Secret shares have underperformed the broader retail sector as the company struggles with brand repositioning and competitive pressures. The stock has faced volatility amid multiple activist investor campaigns targeting management changes 4.
BBRC International, run by Brett Barakett, represents the latest challenge to Victoria’s Secret leadership. The investment firm, which has never run an activist campaign before, is specifically targeting Chair Donna James for removal 2.
Detailed analysis
This marks the second major activist investor to target Victoria’s Secret in 2024. Barington Capital Group previously built a stake of more than 1% and called for board and strategy changes, criticizing the company’s “defensive strategies” 5.
Activist investors have accused Victoria’s Secret of “consistently poor decisions” and failure to “adequately” address shareholder concerns 3. The company faces particular criticism over its key bra division performance and overall strategic direction 4.
Investor criticism intensifies
Barington Capital has been particularly vocal, slamming Victoria’s Secret’s “super squad” leadership as inexperienced and ineffectual. The investor wants the company to bring back its Angels marketing concept and has criticized CEO leadership 9.
The mounting pressure comes as Victoria’s Secret continues to navigate brand transformation challenges. Multiple activists are now questioning whether current management can execute a successful turnaround strategy 7.
Strategic implications
The dual activist campaigns signal broader investor frustration with Victoria’s Secret’s strategic direction and financial performance. Both BBRC and Barington are pushing for significant governance changes that could reshape company leadership.
Industry analysts view the activist pressure as indicative of deeper operational challenges facing the retailer. The company must address both governance concerns and fundamental business strategy questions to satisfy increasingly vocal shareholders.
Outlook
Victoria’s Secret now faces coordinated pressure from multiple large shareholders demanding immediate changes. The company’s response to these activist demands could determine both near-term stock performance and longer-term strategic direction.
The escalating investor activism suggests Victoria’s Secret may need to consider more substantial leadership and strategic changes than previously anticipated. How management responds will be closely watched by the broader retail investment community.
Not investment advice. For informational purposes only.
References
1“Major Investor in Victoria’s Secret Seeks Board Shake-Up”. The Wall Street Journal. Retrieved Nov 4, 2024.
2“Investment firm BBRC, which has never run an activist campaign before”. WSJ Threads. Retrieved Nov 4, 2024.
3“Activist investor calls for changes at Victoria’s Secret”. Chain Store Age. Retrieved Nov 4, 2024.
4“Victoria’s Secret rises as another activist wants a board overhaul”. Sherwood News. Retrieved Nov 4, 2024.
5“Victoria’s Secret Pressured by Second Investor Urging Change”. Bloomberg. Retrieved Nov 4, 2024.
6“Victoria’s Secret Pressured by Second Investor Urging Change”. MSN. Retrieved Nov 4, 2024.
7“Activist investor seeks changes at Victoria’s Secret”. Seeking Alpha. Retrieved Nov 4, 2024.
8“Victoria’s Secret Under Pressure As Barington Calls For Shake-Up”. Finimize. Retrieved Nov 4, 2024.
9“Investor slams Victoria’s Secret ‘super squad’ leadership”. Fashion Dive. Retrieved Nov 4, 2024.