By Lauren Thomas

Activist investor Barington Capital Group has built a stake in Victoria's Secret and believes the lingerie retailer hasn't lived up to its full potential, according to people familiar with the matter.

The investor's arrival adds to the pressure that Victoria's Secret is already facing from another big disgruntled shareholder and after a recent security incident caused the company to temporarily shut down its website.

The details

Barington owns a stake of over 1% in Victoria's Secret and intends to keep buying more shares, the people said. (The exact size of its position couldn't immediately be learned.)

The retailer's stock has tumbled more than 50% so far this year, bringing its market value to about $1.5 billion. After Victoria's Secret separated from what is now Bath & Body Works in 2021, it was valued at over $6.5 billion.

The activist plans to push Victoria's Secret to refresh its board and refocus on its core bra business to turn around its share performance, the people said.

Barington believes that Victoria's Secret is one of the most iconic brands in the world but that managers -- including Chief Executive Hillary Super -- lack the experience and strategic clarity needed to drive a turnaround, the people added. It plans to ask Victoria's Secret to consider replacing a majority, if not all of, the board with new independent directors, they said.

Barington also sees opportunities to unlock value in the retailer's beauty business, which the firm estimates could alone be worth about as much as Victoria's Secret's current market value, the people said.

Super took over as CEO last September after stints at lingerie competitor Savage X Fenty and the apparel retailer Anthropologie. Investors at the time were hopeful that her arrival would help breathe new life into the business. She has since focused on newer areas, including sport and swimwear.

The context

Victoria's Secret is already facing pressure from one of its biggest investors, Australian billionaire Brett Blundy, who this month called for a board overhaul and said the company had suffered from "continued mismanagement" and "disastrous board-level decisions."

In late May, Victoria's Secret adopted a so-called poison pill in an attempt to fend off Blundy's investment firm. BBRC International owns about 12.9% of Victoria's Secret shares, according to a letter made public this month.

Barington considers the shareholder-rights plan to be counterproductive and plans to ask Victoria's Secret to rescind it, the people familiar with the matter said.

Last week, Victoria's Secret narrowed its loss and logged higher-than-expected sales in its fiscal first quarter. Still, its outlook for the current quarter was short of analysts' expectations, and the retailer said it was seeing tepid consumer demand in an uncertain macroenvironment.

The company did highlight strength in beauty and said it was looking to "supercharge" its bras business.

Barington isn't a stranger to Victoria's Secret. It amassed a stake in L Brands in 2019 and pushed for a split from Bath & Body Works. The firm, led by James Mitarotonda, primarily invests in consumer and industrial companies.

Write to Lauren Thomas at lauren.thomas@wsj.com

(END) Dow Jones Newswires

June 15, 2025 19:02 ET (23:02 GMT)

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