An influential activist investor is turning up the heat on Victoria’s Secret, demanding a sweeping overhaul of its board and blasting the leadership of CEO Hillary Super for what it calls a “destruction” of shareholder value.
Barington Capital Group, a New York-based hedge fund with a more than 1% stake in the company, issued a scathing letter Monday to Board Chair Donna James. The fund claims the lingerie giant has floundered since its 2021 split from parent company L Brands, shedding an estimated $2.4 billion in shareholder value under the current leadership.
“We believe that Victoria’s Secret requires a reconstituted Board comprised of directors with proven experience in brand revitalization, operational execution, international expansion, and shareholder value creation,” wrote Barington CEO James Mitarotonda.
Targeting the CEO’s Track Record
Barington took direct aim at CEO Hillary Super, questioning her ability to navigate the brand through a challenging retail landscape. The letter cites her “limited chief executive and public company experience” and brief history in the intimate apparel sector.
The fund also expressed concern that Super “has not gained the confidence of employees” and accused her of misaligned priorities, including a focus on relaunching the Pink sub-brand and expanding into athleticwear instead of stabilizing the core lingerie business and international growth efforts.
“Failing to prioritize the company’s core business and international growth,” Mitarotonda wrote, “is a sign of a lack of strategic focus.”
Stock Ticks Up as Investor Pressure Mounts
Interestingly, Victoria’s Secret shares rose Monday morning following the publication of the letter on Barington’s website. The company’s stock (NYSE: VSCO) gained 2.36%, closing at $18.62, a possible indication that markets are responding positively to the pressure for change.
Calls for a Clean Slate on the Board
In addition to its CEO critique, Barington pointed out that six of the nine current board members were present during Victoria’s Secret’s financial decline. The remaining independent directors, the letter argues, lack the experience needed to drive global growth in a competitive consumer market.
The firm urged a bold solution: “The retailer should consider replacing a majority – if not all – of the Board with independent directors who bring relevant backgrounds, fresh perspectives, and a strong track record of value creation.”
Opposition to ‘Poison Pill’ Defense
Adding to its list of grievances, Barington slammed Victoria’s Secret’s recently adopted shareholder rights plan — often dubbed a “poison pill” — as a misguided and harmful measure.
“Equally troubling, it risks entrenching management and the Board at a time when meaningful change is warranted,” the letter said, cautioning that such anti-takeover defenses often correlate with poor market performance. “Academic research and real-world experience demonstrate that companies with weak governance structures and strong anti-takeover provisions tend to trade at lower valuations.”
Investor Pushes for Back-to-Basics Approach
So, what does Barington want instead?
To help “regain its footing and succeed,” the fund is urging the company to return to basics focusing on its core product categories like bras, reinvesting in digital and international markets, and streamlining its bloated operating model.
Track Record of Results
This isn’t the first time Barington has taken an activist stance. The firm previously advised L Brands, and during that engagement, the company’s share price soared 221.5%, according to the letter.
That history, paired with the investor’s growing dissatisfaction with the current direction, sets the stage for what could become a high-stakes battle over the future of Victoria’s Secret.
