The changing of the guard continues at Victoria’s Secret’s L Brands, as the retailer emerges from a strong holiday season.
The lingerie giant has promoted Martin Waters, currently chief executive officer of Victoria’s Secret Lingerie, to CEO of the entire Victoria’s Secret business, effective immediately. Waters, who replaced John Mehas as CEO of the lingerie division last November, will report directly to Andrew Meslow, chief executive officer of parent company L Brands. Amy Hauk, chief executive officer of Victoria’s Secret Pink, and Greg Unis, chief executive officer of Victoria’s Secret Beauty, will report to Waters.
“Martin Waters is an experienced retail executive who has led our international business for the past 13 years and recently stepped into the role of CEO of Victoria’s Secret Lingerie,” Meslow said in a statement. “He is widely respected both inside and outside of our enterprise and we are confident he will continue the momentum and progress in the Victoria’s Secret business.”
The company also revealed on Thursday that Stuart Burgdoerfer will retire as chief financial officer of L Brands and interim chief executive officer of the Victoria’s Secret business. Burgdoerfer has been serving in the interim CEO role since May.
“Stuart has been an exceptional CFO for the last 14 years and has built an extremely knowledgeable and talented senior finance team,” Meslow said. “On behalf of the entire company, I’d like to thank him for his dedication, extraordinary efforts and leadership.”
Sarah Nash, chair of L Brands’ board, added, “The board and I are extremely grateful to Stuart for his leadership during his 20-year career at L Brands. In the last nine months, he has led the turnaround of the Victoria’s Secret business in addition to continuing to lead L Brands’ finance organization as CFO. He will be missed and we appreciate that he will remain with the business to see us through the planned separation process.”
Burgdoerfer will remain in the CFO role, however, until August, helping finalize the separation of the Victoria’s Secret’s business — which includes the lingerie, beauty and Pink divisions — and Bath & Body Works brand. The spin-off, which the company anticipates will be complete by August, will take Victoria’s Secret private, while Bath & Body Works remains on the public market as a stand-alone firm.
L Brands first revealed its plans to take Victoria’s Secret private last May, after the $525 million deal with private equity firm Sycamore Partners to buy the lingerie brand fell through.
Since then the innerwear brand has been in recovery mode, adding a string of senior-level hires over the last few months to help turn the business around and updating the assortment and marketing materials. It has also sold a majority stake of the Victoria’s Secret U.K. business to Next plc and closed hundreds of unprofitable stores to make way for more lucrative markets, such as Milan and Israel.
“All options, including a spin-off of the Victoria’s Secret business into a public company or a private sale of the business, are being evaluated,” the company said in a statement Thursday, adding that L Brands is in the process of looking for a new CFO.
Meanwhile, the company raised its fourth-quarter earnings’ guidance from its January estimates of $2.70 to $2.80 a share to $2.95 to $3 a piece. L Brands is now also anticipating fourth-quarter comparable sales to increase 10 percent — or 22 percent at Bath & Body Works and a three percent decrease at Victoria’s Secret.
Shares of L Brands, which are up nearly 96 percent year-over-year, closed up 9.35 percent to $48.07 a piece Thursday as a result.
“We expect these beats are still in early innings,” Simeon Siegel, managing director and senior retail analyst wrote in a note. “Buy shares, the story is (still) incredibly compelling.
“The stronger VS gets, the more difficult a sale will become and a spin may prove the way to go,” he continued. “Though we do acknowledge the heated [special purpose acquisition company] environment as a potential wildcard acquirer.”
The company will report quarterly earnings on Feb. 24 after the market closes.