Australian billionaire Brett Blundy wages high-stakes campaign to oust chair of Victoria’s Secret | Business
Australian billionaire Brett Blundy is waging a high-stakes campaign to unseat the long-term chairmanship of Victoria’s Secret & Co, setting the stage for a showdown at the company’s annual meeting in the United States on Thursday.
Blundy’s investment company, BBRC International, owns about 13% of the US-listed Victoria’s Secret lingerie brand, making it the second-largest single shareholder and giving it a potential platform to launch a hostile takeover.
The Monaco-based Australian actress is also the president of the Lovisa jewelery brand, the founder of Léays lingerie stores, and the former owner of the Bras N Things and Honey Birdette brands.
The BBRC wants long-term chairman Donna James removed from the board after a years-long battle over the company’s strategy and its decision not to appoint her as a director.
Blundy, whose net worth is $4.5 billion according to the AFR rich list, has been pushing for changes at the company since around 2021 and has unsuccessfully sought a position on the board.
She made her concerns public in May when she asked Victoria’s Secret shareholders to get rid of Mariam Naficy, the president and another director. Naficy has since decided not to seek re-election.
The BBRC did not respond to Guardian Australia’s questions.
According to a letter filed with the U.S. Securities and Exchange Commission, Blundy previously expressed concern that the board was not focused on shareholders’ interests because executives were not heavily invested in the company.
He argued that shareholders “have suffered from years of undervaluation, misallocated capital and anti-shareholder management.”
Blundy also claimed that James’ long tenure affected the independent audit.
The vote will take place at the company’s annual general meeting at 8.30am eastern time on Thursday (10.30pm AEST).
The lingerie and beauty company’s board of directors said it had rejected Blundy’s past requests for a board seat due to the “significant reputational risk” threatened by his involvement with Lovisa and Honey Birdette.
Lovisa is defending a class action lawsuit alleging that it directed its staff to work overtime without compensation. In 2016, Honey Birdette described as “misinformation” reports that it required sexist dress codes and vulgar language from its employees.
Victoria’s Secret claimed in a note to shareholders that one of Blundy’s “most trusted advisors” at the BBRC visited numerous stores and falsely claimed to be working with the company to obtain confidential sales information.
The BBRC disputed the nature of the man’s behavior but said all material referred to in the agreement with the company had been destroyed.
‘Poison pill’
The acrimony between the parties is so great that the underwear company used a “poison pill” to thwart a hostile takeover attempt by Blundy.
Under the plan, existing shareholders will be given the opportunity to buy more shares if Blundy or another investor acquires more than 15%.
The strategy was designed to dilute the shares of a hostile bidder who was building a large stake.
Three proxy advisory firms, Institutional Shareholder Services (ISS), Glass Lewis & Co and Egan-Jones Proxy Services, offered their support to the board, arguing they were best positioned to increase shareholder value.
While ISS acknowledged Blundy’s concerns about James’ long tenure and the business’ initial poor performance following its split from former parent L Brands in 2021, it recommended against voting for the chairman.
The lingerie company “stumbled out” after the closure, but performance has since turned around, says the proxy firm advising major shareholders.
“In light of these and other assessments, the opposition has failed to provide a convincing justification for the removal of the chair,” ISS said.
The company’s recent strong performance could pose a significant obstacle to Blundy’s attempt to replace the board, given that Victoria’s Secret shares have surged more than 50% in the past month, quelling investor concerns.
Analysts attributed some of the recent strong performance to the company’s decision to re-establish its brand as a high-end name for affluent customers and luxury purchases by reducing discounts.
Victoria’s Secret is leaning into its past by recently relaunching its famous annual fashion show after a six-year hiatus.
On June 2, the U.S. ticker changed from “VSCO” to “VSXY,” a nod to the company’s renewed focus on sexy branding.
