A major investor in Victoria’s Secret urged the flailing lingerie maker in a letter Tuesday to shake up its board – attacking the current chair as “over-tenured” with a “stale perspective.”
BBRC International – which owns a nearly 13% stake in Victoria’s Secret, making it the second-largest shareholder – is calling for longtime Chair Donna James to be fired and asking for a board seat for its founder, Australian billionaire Brett Blundy.
The private equity firm started building its stake in 2022 and has been privately pushing for changes since last year, according to the letter sent Tuesday to members of the board.
“Absent the board re-evaluating its posture and demonstrating a genuine willingness to engage in good faith, BBRC intends to replace directors at next year’s annual meeting of stockholders – if not sooner,” Blundy wrote in the letter.
“By any measure, she [James] is an ‘over-tenured’ director with a ‘stale perspective’ that lacks objectivity regarding the company’s operations,” he added.
Victoria’s Secret, meanwhile, said that Blundy’s letter was “circulated to the media before it was even sent to the Board, an action that we believe demonstrates a lack of interest in a constructive approach.”
“The Board has engaged extensively with BBRC and is conducting a thorough review of Mr. Blundy in response to his demand for a Board seat and other changes,” the company said in a statement.
Victoria’s Secret claimed it has been willing to engage with BBRC over the past few months, but Blundy has refused to respond to follow-up questions that his counsel demanded the company send.
The company’s previous owner, L Brands, changed its name to Bath & Body Works in 2021 and spun off Victoria’s Secret.
Since then, Victoria’s Secret has seen its stock plunge about 15% and its market capitalization sink below $3 billion.
Its rebrand away from sexy bras to comfy options failed with customers, and it has struggled to keep up with intense competition from rivals like Rihanna’s Savage X Fenty and Kim Kardashian’s Skims.
Earlier this year, it also suffered a three-day website outage due to a cyberattack.
In June, activist investor Barington Capital Group announced it had built up a stake in the company and was pushing for a board shake-up.
But Tuesday’s letter is a first for Blundy’s firm, which has never before led an activist campaign.
Shares in the company dipped 0.4% Tuesday.
BBRC has $3 billion invested in retailers worldwide, known for working with brands like high-end lingerie maker Honey Birdette and Australian women’s clothing label DISSH.
Victoria’s Secret has accused BBRC of building up its stake in the company without making the proper antitrust filings.
It adopted a shareholder-rights plan earlier this year in an effort to block any takeover attempt.
Meanwhile, Hillary Super joined Victoria’s Secret as its new CEO last fall after briefly leading Savage X Fenty and Anthropologie, which has the same parent company as Urban Outfitters.
Super has been focused on revamping the notoriously skimpy Victoria’s Secret fashion shows and adding new products to bring sexy back to the brand, like double-push up bras and a new underwire bra covered in fabric to make it more comfortable.
Her predecessor, Martin Waters, had tamed down the brand’s sex appeal in 2019 amid calls for body diversity and positivity.
He canceled the fashion show and released new products that prioritized comfort, like bralettes – which initially boosted sales, but ultimately stalled out.
“Decisions were made out of fear,” Super told the Wall Street Journal last month, calling the move a mistake.
James, the company’s chair, previously served as a board member for L Brands for nearly two decades.
