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By Abigail Summerville and Anuja Bharat Mistry
NEW YORK (Reuters) -Activist investor Barington Capital Group is pushing Victoria’s Secret to alter its board and end a recently adopted "poison pill" plan, according to a letter to the lingerie maker’s shareholders on Monday.
The New York-based hedge fund, which owns more than 1% of the company, said Victoria’s Secret has underperformed its competitors and lost over $2.4 billion in shareholder value since its spin-off in 2021 from former parent company L Brands.
On Sunday, Reuters reported, citing sources, that Barington wants the company to replace most or all of its board and end the "poison pill" plan that it adopted in May to protect the company from hostile takeovers.
"Barington has not sought to engage with us, but we look forward to discussing their views with them," a Victoria’s Secret spokesperson said.
"We are confident that executing our strategy under the new and experienced leadership team will continue to unlock value for our shareholders," the spokesperson added.
Its shares, which have lost more than half of their value so far this year amid waning demand, were up about 3% in morning trade.
Victoria’s Secret requires a reconstituted board comprising directors with "proven experience in brand revitalization, operational execution, international expansion, and shareholder value creation," James Mitarotonda, Barington’s founder and CEO, said in the letter.
The investment firm said the retailer should focus on core categories and initiatives, like bras and the Angels campaign, and accelerate growth in digital and international markets.
Barington highlighted concerns about the company’s leadership, and said Chief Executive Hillary Super, who took over in September 2024, has limited public company experience, and that the rest of the board lacks the necessary experience to revitalize the iconic brand.
Victoria’s Secret, with a market capitalization of about $1.45 billion currently, adopted the poison pill plan to fend off Brett Blundy’s investment firm, which increased its stake in the company to around 13%.
Barington’s pressure puts Victoria’s Secret in a "precarious position" as it tries to fend off other activist investors and restore confidence in CEO’s turnaround plan, eMarketer analyst Rachel Wolff said, adding that investors’ growing dissatisfaction with leadership could force a change at the company’s management level.
Barington previously pushed for changes at L Brands, which split into Victoria’s Secret and Bath & Body Works (NYSE:BBWI).
Earlier this year, Barington mounted its first full-blown board room challenge since 2015 when it tried to put three directors on the board of casket maker Matthews International (NASDAQ:MATW) but ended up losing the vote.