NEW YORK (BLOOMBERG) - New allegations of sexual misconduct have surfaced at Victoria's Secret as the brand tries to remake its image after years of scandal and slumping sales.
Female models and executives were bullied and harassed for decades at the lingerie chain, evidence of an "entrenched culture of misogyny," according to a New York Times investigation published this weekend.
The revelations come days after reports that L Brands Inc, owner of the troubled retailer as well as Bath & Body Works, was in talks to break up the company and that longtime Chief Executive Officer Les Wexner could step down.
The allegations, coupled with criticism of the brand's marketing and lingering questions around the company's relationship with the late convicted sex offender Jeffrey Epstein, continue to erode Victoria's Secret's chances to rebound as it faces rising competition.
The culture at Victoria's Secret was presided over by Ed Razek, the company's controversial former chief marketing officer, as well as Wexner, according to interviews the Times conducted with more than 30 current and former executives, models and others, and from documents including court filings.
Razek was the vision behind the chain's once iconic fashion show where lacy lingerie-clad models strutted the runway wearing angel wings. Razek didn't immediately respond to a voicemail request for comment.
In a statement, independent directors on the L Brands board said the company is making strides in ensuring a safe workplace, and it has in recent years adopted "more robust anti-harassment policies, hotline' reporting, and training."
"We regret any instance where we did not achieve this objective and are fully committed to continuous improvement and complete accountability," the directors said.
Victoria's Secret has for years been criticised for promoting models of a certain body type, while consumers have demanded more diversity, as well as themes of female empowerment.
Wexner has since expressed regret over his association with Epstein, who in years past had served as his money manager. Epstein killed himself inside his jail cell in August as he was awaiting trial on federal sex trafficking charges.
"Everyone has to feel enormous regret from the advantage that was taken of so many young women," Wexner said of Epstein at a September investor meeting in Columbus, Ohio. "That's just unexplainable abhorrent behavior and clearly something we all would condemn."
L Brands shares fell as much as 3.2% on Monday in New York. They have declined in each of the past four years.
L BRANDS PROBE
Last July, L Brands said it hired an external law firm to investigate any ties between the company and Epstein. Wexner's relationship with him ended 13 years ago and the company doesn't believe Epstein was ever formally employed by Victoria's Secret.
It's unclear exactly what the review, which is being conducted by Davis Polk & Wardwell, a firm with deep ties to Wexner, is focused on. Six months in, it's still continuing.
In August, more than 100 models including Christy Turlington Burns and Edie Campbell signed an open letter to Victoria's Secret CEO John Mehas calling for him to protect models against sexual harassment and assault.
Razek left Victoria's Secret that same month. In a note to employees, he said he'd recently told Wexner he wanted to retire. "With the exception of Les, I've been with L Brands longer than anyone," he wrote. "It's a tough conversation to have because, as some of you must know, we have shared so much together for so many years."
Epstein associated with Razek as well, and had some influence at Victoria's Secret. In 2005, he was welcomed as a guest at Epstein's Manhattan mansion, which was filled with young women who said they were working as models. Razek told a fellow guest that Victoria's Secret used Epstein models.
Many of the allegations outlined by the New York Times involve Victoria's Secret's annual fashion show, a global marketing phenomenon that typically aired in November.
Razek had presided over it for decades, helping select the models and giving them locker room pep talks before the event. It was cancelled last year as the label looked to alter its image.
Davia Temin, CEO of crisis consulting firm Temin and Company, said the problems at Victoria's Secret have become endemic, and it may need a new owner to survive. Patching up the brand by tweaking advertising won't be enough, she said.
"Unfortunately, now Victoria's Secret's brand has gone to sleazy from sexy," Temin said. "And no re-brand is going to fix that."