Investor asks L Brands to separate Victoria’s Secret, Bath & Body Works

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A woman walks past a Victoria’s Secret store in Midtown Manhattan, March 1, 2019 in New York City.

An investor in Victoria’s Secret parent L Brands is asking the company to consider splitting fragrance and personal care shop Bath & Body Works from the lingerie chain.

The hedge fund Barington Capital sent a letter to L Bands Chairman and CEO Leslie Wexner on Tuesday. Its shares were trading up by more than 3 percent on Tuesday.

In the letter, Barington Capital argues that improved merchandising and fresh branding would help the struggling Victoria’s Secret brand. The hedge fund says Victoria’s Secret was late to the athleisure trend and missed the shift toward bralettes and sports bras.

“Victoria’s Secret’s brand image is starting to appear to many as being outdated and even a bit ‘tone deaf’ by failing to be aligned with women’s evolving attitudes towards beauty, diversity and inclusion,” Barington writes in the letter.

L Brands said last month it plans to close roughly 53 Victoria’s Secret stores in 2019. Comparable store sales for Bath & Body Works, known for its scented lotions and candles, rose 12 percent in the fourth quarter of 2018.

The hedge fund said it is encouraged by Victoria’s Secret’s recent reentry to the swimwear category. The letter notes while the brand has improved diversity in its advertising campaigns, it still uses models that “depict a very narrow definition of beauty.”

Barington also asked L Brands to make changes to its directors to improve the independence and diversity of its board.

Barington and L Brands did not immediately respond to CNBC’s request for comment.

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