BBRC International Expresses Disappointment in Victoria's Secret Board
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
BBRC International, a long-term stockholder of Victoria's Secret & Co. and owner of approximately 13% of the Company's outstanding shares, issued a statement in response to the Company's May 20 presentation. The statement read, in part, "Over the past year, VS has repeatedly misrepresented BBRC's intentions while ignoring every concern we have raised regarding the Board's slow and poor decision-making during the 25-year tenure of Chair Donna James. Stockholders should note where VS has chosen to focus its defense. Rather than explain why Ms. James should be trusted with a 26th year after the record of the last 25, the Board has devoted its presentation to attacking BBRC. A board confident in its Chair's record defends that record - it does not change the subject. As a large, committed stockholder that has owned shares since 2022 and brings a highly relevant background in the global lingerie and specialty retail sector, we are deeply disappointed in the Board's refusal to acknowledge its errors and make a common-sense change to ensure similar mistakes are not repeated. We acknowledge the turnaround that has begun under CEO Hillary Super - the Company's claim that we do not is false. But a few quarters of recovery do not erase the mistakes made under Ms. James' oversight, nor do they justify keeping the leader who made a turnaround necessary. After 25 years, we believe it is uncontroversial for Ms. James to step aside so a new Chair can ensure the turnaround is successful over the long term. Because the Board has refused to address Chair succession, it now falls to stockholders to advocate for the change."
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Analyst Views on VSCO
Wall Street analysts forecast VSCO stock price to rise
11 Analyst Rating
4 Buy
7 Hold
0 Sell
Moderate Buy
Current: 50.550
Low
29.00
Averages
53.40
High
73.00
Current: 50.550
Low
29.00
Averages
53.40
High
73.00
About VSCO
Victoria's Secret & Co. is a specialty retailer of women's intimate and other apparel and beauty products marketed under the Victoria's Secret, PINK, and Adore Me brand names. The Company offers a range of products including bras, panties, lingerie, casual sleepwear, apparel, sport and swim, as well as prestige fragrances and body care. Victoria’s Secret brand offers bras, panties, lingerie, casual sleepwear, swim, lounge and sport, as well as fragrances and body care. PINK is a lifestyle brand for young women providing variety of collections and heritage pieces, including apparel, loungewear, activewear, bras, panties, accessories, beauty, and others. Adore Me is a direct-to-consumer lingerie and apparel brand that is focused on serving women of all sizes and budgets.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Acknowledgment of Turnaround Progress: While BBRC recognizes the turnaround initiated under new CEO Hillary Super, it argues that James's leadership record should not be overlooked, asserting that her continued tenure could hinder the success of the turnaround efforts.
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- Weak Operating Margin: Victoria's Secret's operating margin has averaged 4.5% over the last two years, which is considered low for the retail sector, reflecting a suboptimal cost structure that may lead to declining profitability in the future.
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- Brand Strategy Shift: CEO Hillary Supersaid stated that the company aims to celebrate “sexy” in a more personal, modern, and inclusive manner for women, which is expected to attract a broader female consumer base and enhance brand image and market share.
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See More
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- Board Refreshment: The company’s board highlighted its commitment to driving positive change through board refreshment, management oversight, and ongoing asset reviews to enhance shareholder value, demonstrating a proactive approach to future growth.
- Opposition to Proxy Fight: Victoria's Secret opposes BBRC International's proxy campaign, viewing it as a self-interested disruption that could derail turnaround efforts, with the board rejecting Brett Blundy’s candidacy due to concerns over his conduct and governance issues after extensive engagement.
- Shareholder Voting Appeal: The board urges shareholders to vote for all incumbent directors at the June 11 annual meeting to maintain the company's momentum and support long-term value creation, despite the stock price being down 13.5% year-to-date.
See More
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- Victoria's Secret Increase: David Einhorn raised his stake in Victoria's Secret by 30% in Q1, making it his eighth-largest position, reflecting confidence in the new management's efforts to reshape the brand and suggesting strong growth potential ahead.
- Crocs Brand Challenges: Einhorn's new investment in Crocs shows steady international sales, but ongoing inventory issues with the HeyDude brand pose challenges; if the company stabilizes this brand, significant upside potential exists for the stock.
- Deckers Outdoor Stake Increase: Einhorn increased his stake in Deckers Outdoor by over 60%, and despite concerns about waning brand popularity, the company's strong revenue growth history positions it as a potential bargain buy given its low valuation.
- Peloton's Strategic Shift: Einhorn's stake in Peloton surged by over 4,000%, and while the company has faced declining revenues for four years, its improved gross margin and focus on the commercial gym market could lead to substantial stock price recovery if revenue growth resumes.
See More
Victoria's Secret Returns to Roots Amidst Investor Interest
- Victoria's Secret Revival: Billionaire investor David Einhorn increased his stake in Victoria's Secret by 30% in Q1, noting that new management is restoring the brand's identity, resonating well with customers and stabilizing traffic, indicating strong growth potential ahead.
- Crocs Brand Challenges: Einhorn's investment in Crocs comes despite the underperformance of its HeyDude brand since its 2022 acquisition; however, the company reported an 8% increase in direct-to-consumer sales last quarter and raised its full-year sales forecast, suggesting a potential rebound opportunity.
- Increased Stake in Deckers Outdoor: Einhorn raised his stake in Deckers Outdoor by over 60%, and while concerns linger about the waning popularity of its Ugg brand, the company continues to generate strong revenue growth from its main brands, indicating solid profitability prospects.
- Peloton Margin Improvement: Peloton faced significant challenges post-pandemic, yet despite stagnant revenue growth, its gross margin has returned to pre-pandemic levels, and with plans to launch a new commercial product line and a partnership with Spotify, the company shows potential for future growth.
See More
BBRC Urges Shareholders to Vote Against Chair Donna James
- Shareholder Voting Call: BBRC International PTE Limited, a long-term shareholder owning approximately 13% of Victoria's Secret, urges shareholders to vote against Chair Donna James at the June 11 annual meeting, citing her 25 years of poor decision-making that necessitated the company's turnaround.
- Board Performance Critique: BBRC highlights the board's failure to adequately address past mistakes, particularly in the slow response to CEO changes and capital allocation, which resulted in significant declines in net income and operating income from FY2021 to FY2025.
- Acknowledgment of Turnaround Progress: While BBRC recognizes the turnaround initiated under new CEO Hillary Super, it argues that James's leadership record should not be overlooked, asserting that her continued tenure could hinder the success of the turnaround efforts.
- Capital Allocation Missteps: BBRC criticizes the board's decisions regarding capital allocation, pointing out the failure to repurchase shares during periods of depressed stock prices, which has harmed shareholder value, emphasizing the need for new leadership to ensure more effective future capital decisions.
See More
Victoria's Secret Stock Rises but Outlook Remains Worrisome
- Strong Stock Performance: Victoria's Secret has achieved a 32.2% return over the past six months, outperforming the S&P 500 by 19%, with its stock price rising to $44.69 per share; however, despite this short-term success, concerns about long-term growth potential remain.
- Disappointing Long-Term Revenue Growth: The company has only managed a 1.1% compounded annual growth rate in sales over the past three years, which is below industry standards, indicating a lack of sustained growth that could deter future investment interest.
- Weak Operating Margin: Victoria's Secret's operating margin has averaged 4.5% over the last two years, which is considered low for the retail sector, reflecting a suboptimal cost structure that may lead to declining profitability in the future.
- Declining EPS: Despite slight revenue growth, the company's earnings per share have decreased by 16.2% annually over the past three years, suggesting a decline in profitability per share as the company expanded, prompting investors to carefully assess the associated risks.
See More
Victoria's Secret to Trade Under New Ticker VSXY
- New Ticker Announcement: Victoria's Secret has announced that it will begin trading under the new ticker symbol “VSXY” on the NYSE starting June 2, 2026, reflecting the company's stronger focus on brand identity and strategy to better connect with customers.
- Brand Strategy Shift: CEO Hillary Supersaid stated that the company aims to celebrate “sexy” in a more personal, modern, and inclusive manner for women, which is expected to attract a broader female consumer base and enhance brand image and market share.
- Earnings Report Schedule: Victoria's Secret will report its Q1 2026 financial results before the market opens on June 2, 2026, and this earnings report is anticipated to provide investors with crucial insights into the company's transformation progress, potentially impacting stock performance.
- Market Reaction Expectations: With the launch of the new ticker and adjustments in brand strategy, market reactions to Victoria's Secret will be closely monitored, and investors may adjust their positions based on financial results and initial feedback on brand revitalization.
See More
Victoria's Secret Executes Turnaround Strategy with New Leadership
- Significant Turnaround Progress: Victoria's Secret (VSCO), under the leadership of new CEO Hillary Super, is actively executing a turnaround strategy that is already showing significant performance improvements, indicating that its strategic and operational actions are effective and gaining momentum rather than peaking.
- Board Refreshment: The company’s board highlighted its commitment to driving positive change through board refreshment, management oversight, and ongoing asset reviews to enhance shareholder value, demonstrating a proactive approach to future growth.
- Opposition to Proxy Fight: Victoria's Secret opposes BBRC International's proxy campaign, viewing it as a self-interested disruption that could derail turnaround efforts, with the board rejecting Brett Blundy’s candidacy due to concerns over his conduct and governance issues after extensive engagement.
- Shareholder Voting Appeal: The board urges shareholders to vote for all incumbent directors at the June 11 annual meeting to maintain the company's momentum and support long-term value creation, despite the stock price being down 13.5% year-to-date.
See More
