The news: Activist investor Barington Capital is pushing for changes at Victoria’s Secret, just weeks after the retailer adopted a poison pill measure to thwart a potential takeover attempt by Australian investment firm BBRC International.

How we got here: Unfortunately for Victoria’s Secret, the retailer is a ripe target for activist investors. The company’s underwear business is losing ground to newcomers like Skims, while tariffs are putting considerable pressure on its bottom line.

• To make matters worse, Victoria’s Secret expects a $20 million sales hit this quarter after being forced to take its ecommerce business offline for three days following a cybersecurity incident.
• As of this writing, its market cap was just below $1.5 billion—a fraction of the over $6.5 billion it was valued at in 2021 after splitting off from Bath & Body Works.

What investors want: Both Barington and BBRC are agitating for changes in leadership and strategy, with the latter particularly aggrieved at what it calls “continued mismanagement” and “disastrous board-level decisions.”

Those concerns were echoed by Barington, which expressed unease about CEO Hillary Super’s lack of experience, as well as her decision to peg Victoria’s Secret’s turnaround to its refreshed apparel offerings rather than focus on revitalizing its core bra business.

Our take: The uncertain environment is proving to be too good an opportunity for activist investors to pass up. In Q1 alone, shareholders launched 40 campaigns in the US, accounting for more than half of global activity and a 43% increase YoY, according to a Barclays analysis.

The need to control costs (and to stay in investors’ good graces) could limit companies’ abilities to fight back, forcing them to seriously consider shareholders’ proposals for streamlining operations and shaking up the management ranks. Likewise, buyout offers—like the $9.4 billion deal Skechers accepted—will likely become more attractive as retailers look for ways to hide the toll that tariffs are taking on their businesses.

While Victoria’s Secret is projecting defiance for now, the pressure from investors who now control at least 14% of the retailer’s shares coupled with uncertain consumer demand could eventually force its hand.

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