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L Brands Changes Victoria’s Secret Leadership In A Bid To Revive The Ailing Brand
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L Brands Changes Victoria’s Secret Leadership In A Bid To Revive The Ailing Brand

L Brands announced leadership changes for its Victoria’s Secret brand as part of its efforts to revive the lingerie line. The company said that John Mehas, the CEO of Victoria’s Secret since February 2019, will be replaced by Martin Waters, effective immediately.

Waters joined L Brands (LB) back in 2008 as head of the international division. The company disclosed that Waters will report to Stuart Burgdoerfer, interim CEO of Victoria’s Secret and CFO of L Brands. Victoria’s Secret was previously known as one of the most popular lingerie brands. However, it has been struggling to grow its sales and is losing ground to more inclusive intimate apparel brands like American Eagle Outfitters’ Aerie.

In addition to the CEO change, L Brands also announced other appointments for Victoria’s Secret. It named Laura Miller as the Chief Human Resources Officer, promoted Becky Behringer to Executive Vice President of North America Store Sales and Operations and appointed Janie Schaffer as Chief Design Officer. (See LB stock analysis on TipRanks)

Last week, Morgan Stanley analyst Kimberly Greenberger raised the price target on L Brands to $40 from $30, following what she felt was an “impressive revenue and gross margin snapback” in 3Q. The analyst noted that the quarterly results suggest the Victoria’s Secret turnaround is on track and Bath & Body Works could deliver higher profitability than it has in the past. However, Greenberger reiterated a Hold rating based on management’s “cautious” commentary on 4Q.

Meanwhile, L Brands scores the Street’s Moderate Buy analyst consensus, with 8 Buys, 6 Holds and 2 Sells. Shares have risen by a staggering 114.9% so far in 2020. The average price target of $42.56 indicates an upside potential of 9.3% from current levels.

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