Leslie Wexner, founder and CEO of L Brands, is in talks to step down from his position after 57 years at the helm, according to the Wall Street Journal. If Wexner were to exit, he would be the latest CEO to do so amid slumping sales and controversy.
Wexner started out working in his parents’ clothing store. Then, from one small store in Columbus, Ohio, Wexner built a number of brands into household names and national chains, including Abercrombie & Fitch, The Limited, Bath & Body Works and Victoria’s Secret. In the process, he has amassed a fortune Forbes pegs at $4.6 billion. Wexner has been in charge of his company since 1963 and took it public six years later. He’s a pioneer in clothing retail and the creator of much-loved specialty brands. Wexner is the company’s largest shareholder, owning about 17% of the company.
An unfortunate combination of events—some of which were self-inflicted—led to L Brand’s decline. The problems include remaining too attached to products and advertising that are perceived as tone-deaf by consumers. Victoria’s Secret, the flagship of L Brands, has seen its market share in the U.S. free fall in recent years, as it’s been accused of over-sexualized ads and promoting unrealistic body image. The brand, advertising and marketing epically failed to resonate with its core customers and turned off new business in the current #MeToo era.
In an internal memo, Wexner wrote, “Fashion is a business of change. We must evolve and change to grow.”
However, the company failed to move the needle in body positivity.
The lackluster performance of the brands, online competition, slumped share price and an apparent reluctance to change with the times caught the attention of an activist hedge fund that fought for changes at the board level.
A glaring public relations nightmare and ethical dilemma for the company, its employees and customers is the relationship Wexner maintained with alleged pedophile financier Jeffrey Epstein, who managed his financial assets, allegedly misappropriating more than $46 million from him and purchased a Manhattan mansion from Wexner.
Last year, the company’s board of directors hired a law firm to conduct an investigation into what, if any, role Epstein might have had at L Brands. The results have not been made public. Shortly thereafter, Wexner addressed his ties to the disgraced late financier, saying, “Being taken advantage of by someone who is…so depraved is something I’m embarrassed I’m even close to.” He added, “We are all betrayed by friends. At the end of the day, people have secret lives because…they’re so good at hiding those secrets.”
It used to be that CEOs packed their boards with croneys and sycophants and ruled their companies as if they were kings. It was exceptionally hard to cast aside the top executive—even if they were doing a poor job—due to their inherent power, control, political contacts and firm grasp over the company. Times have quickly changed. Chief executives are leaving in record numbers. In 2019, more than 1,332 CEOs stepped aside.
The list of well-known CEOs who have relinquished their exalted positions due to alleged financial, ethical and inappropriate activities, includes McDonald’s Steve Easterbrook, WeWork CEO Adam Neumann, Kevin Burns Juul, EBay CEO Devin Wenig, Uber’s Travis Kalanick, Overstock.com’s Patrick Byrne, Nissan Motor’s Carlos Ghosn, Mark Parker from Nike and Dennis Muilenburg at Boeing.
It seems that even though Wexner built his empire from scratch, even he is not untouchable.