Victoria’s Secret Needs a Different Kind of Angel

(Bloomberg Opinion) – The company’s demands of the Bardon Capital Group, one of the two activist investors who want to shake Victoria’s Secret & Co., is a synonym with the US largest underwear retailer.

But what Victoria’s Secret really needs is a different angel: a buyer. Ideally, someone who can offer a good offer premium to the shareholders who have been suffering for a long time and enable the company to work hard to adapt to a new view of a new underwear away from the shine of the three -month earnings. Agitators and retailers should stop trading thorns and work together to provide value to all investors.

If Victoria’s Secret puts on sale, activists can make it easier to buy by combining the bidder with their forces or supporting their offer.

Buying both the Baleington Capital and 12.9% shares, which has more than 1% of the retailer and 12.9%, the BBRC International PTE calls Victoria’s secret to make changes to the board of directors and to strategy to address the low performance of its shares. It has a meaning. Since the company came out of L Brands Inc. four years ago, it lost more than half of the stock value.

Victoria’s Secret led the underwear market for years. However, in the midst of the #metoo period, the company seemed to be male dominant and uncontrollable. Former L Brands President and Executive Chairman Leslie Wexner Association’s infamous late financier Jeffrey Epstein triggered the scandal only the brand. Victoria’s Secret Angels replaced with a group of women known for their achievements and views, as well as prepared for life as a separately listed company. However, the vs collective, as it is known, could not make turbo charging sales and dispersed quietly.

In the autumn, under the new CEO Hillary Super, the company organized an updated version of the fashion show, once an annual marketing extravaganza, once a cultural power. It was a step in the right direction. However, Victoria’s secret is still fighting to find its place in a market filled by Nimbler rivals such as Kim Kardashian’s Skims and Rihanna’s previously led by the wild X Fenty.

Victoria’s Secret should find a modern sexy version that embraces different body sizes and also changes the tastes of underwear. This involves shifting from the gym to more softer brains and sports bras carried from the gym to the daily wardrobe.

There are some encouraging signs. For example, Victoria’s Secret is currently wearing Sabrina Carpenter’s pop superstar. In the midst of concern about the return to the offices and the labor market, more official clothes that require structured underwear are returning. Bloomberg Intelligence Analyst Mary Ross Gilbert continues to be the retailer not only in the US but also globally. While the core brand-and sister line has a great recognition, including Gen-Z consumers, GAP Inc. Other shopping center brands such as prove that it is possible to ride a wave of nostalgia for sales.

However, to make the most of this potential – it must progress further in updating the image and stores of the company and develop closer ties with Carpenter – requires significant investment. President Donald Trump will cost the company to $ 50 million this year and will cost the increasing pressure on US consumers and will continue to explain short -term financial pain.

Victoria’s Secret launched a shareholder plan with a poison pill designed to stop an investor from building a control -controlled share without paying a premium. However, it does not block the company considering an offer.

Victoria’s secret is not a huge bite to attract a buyer. The market value of the company fell to approximately 1.5 billion dollars. The 30% premium, which is standard in the acquisition agreements, will value the company’s equity value of approximately $ 2 billion. However, considering how long the shares extend, 50% premium seems more appropriate. At the end of this fiscal year, add the expected net debt, except for the lease obligations of $ 600 million and the operating value will still be below $ 3 billion – it cannot be reached for many private capital groups.

Assuming that a successful reconstruction is removed in the core underwear business, beauty, pink and reconstructed swimsuits and active clothing units, as well as progress, the company may be re -experienced at a higher valuation.

Indeed, there is a precedent about how it can play: Breitling Ag. Like the secret of Victoria, the Swiss watchmaker had a lot of baggage thanks to the sexist marketing. However, in 2017, the majority shares were purchased by CVC Capital Partners, he abandoned unpleasant ads and introduced a series of renewed products. Payment: Breitling’s 2024 income is estimated to be about 820 million Swiss francs ($ 1,02 billion) and about twice the 2016 sales. The company’s valuation increased to 4.2 billion in 2022, when 800 million francs in 2017 sold the majority stake in the clock manufacturer. Of course, the luxury market has fallen since then, but if the new owner of Victoria’s Secret had invented a similar again, he would look at healthy returns.

Selling yourself can be seen as a sign of weakness. However, some private capital buyers do not come to play without the encouragement of an open door. And a special agreement that pays part of the rescue value in a premium of the shareholders is similar to the best conclusion. Victoria’s secret from selling underwear to selling a underwear company.

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This column reflects the author’s personal views and does not reflect the opinion of the Editorial Board or Bloomberg LP and owners.

Andrea Felteded is a Bloomberg vision columnist covering consumer goods and retail sector. Previously, he was the correspondent of Financial Times.

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