Is Jeffrey Epstein Victoria’s Secret?
“We always knew he was closely tied to the Wexners. We knew that from the get-go. Epstein was using the Victoria’s Secret connection to get a lot of the girls to come to the (New York) house. That was part of his lure for the teenage girls.” — Spencer Kuvin, Epstein victims attorney.
I believe the ties between Victoria’s Secret and Jeffrey Epstein have been underreported and not priced into its parent company stock, L Brands (NYSE: LB). As the media and public realize the alleged role Victoria’s Secret played in Epstein’s abuse I believe the Victoria’s Secret brand could be irreparably damaged and LB stock will fall.
Executive Summary
· Jeffrey Epstein had 11 contact methods for Ed Razek, head talent scout at Victoria’s Secret, in his black book (Page 78)
· Ed Razek personally approved all Victoria’s Secret “Angel” castings
· In November 2002, Epstein was “spotted in the front row of the Victoria’s Secret fashion show.”
· A 2003 Vanity Fair profile claimed “[Epstein] is a familiar face to many of the Victoria’s Secret girls.”
· A 2007 New York Post article claimed Epstein told a 16-year-old aspiring model, “If you want me to help you then you have to help me.” Epstein’s lawyer denied the allegation.
· A 2016 book, “TrafficKing: The Jeffrey Epstein Case,” claims Epstein would promise some victims modeling jobs at Victoria’s Secret.
· An anonymous source in a recent New York Post article claimed, “[Epstein] portrayed himself as the back door to get a girl into Victoria’s Secret. Some of those girls got in.”
· Les Wexner (CEO, Founder and largest shareholder of L Brands) is the only known client of Jeffrey Epstein and praised Epstein’s “excellent judgment and unusually high standards” in 2003. In many cases, the line between Wexner’s money and Epstein’s appears blurred.
· Les Wexner claimed he “completely severed ties with Mr. Epstein nearly 12 years ago.” However, his wife and a longtime employee were the two co-trustees of YLK Charitable Fund, formed in December 2007 — shortly before Epstein went to jail. Epstein transferred $46 million to this charity, which made two donations and shut down in 2011 after Epstein was released from prison.
· Victoria’s Secret provides 55% of the revenue for its parent company, L Brands. Its stock (NYSE: LB) seems mostly unaffected by the Epstein news and is up 5.6% over the last month. LB has ~$9 billion in debt.
· If you have information on Jeffrey Epstein or Victoria’s Secret please contact me at edorsey@stanford.edu or @BatmanResearch on twitter
· Disclaimer: I have no position in LB stock and am not being compensated for this article. This article represents my opinions or facts from public sources. I am a Stanford junior passionate about short-biased research.
Jeffrey Epstein and Victoria’s Secret
On page 78 of Jeffrey Epstein’s “black book” (a group of his contacts published by Gawker in 2015), you can find Ed Razek and his 10 phone numbers and one email. Ed Razek is Chief Marketing Officer of Victoria’s Secret and he “personally approves the casting of each model.”
Why did Epstein have 10 phone numbers for Ed Razek and why is Razek the only Victoria’s Secret employee Epstein had in his black book?
I believe Epstein’s connection with Razek is part of a broader theme that Epstein may have used Victoria’s Secret to possibly recruit new victims.
For example, in November 2002, Epstein was “spotted in the front row of the Victoria’s Secret fashion show.” And a 2003 Vanity Fair profile claimed “[Epstein] is a familiar face to many of the Victoria’s Secret girls.” In addition, Ghislaine Maxwell, a close associate of Epstein’s “was a constant fixture at Victoria’s Secret events.” And would brag about “new ‘pop tarts,’ which is what she called the young models.” Ed Razek also allegedly compared his models to “thoroughbreds” according to Time magazine.
According to the 2016 book, “TrafficKing: Jeffrey Epstein Human Trafficking Case,” “[Epstein] apparently found a way to identify, source and transport underage girls legally by allegedly employing some of the girls under false pretenses as models hired to work for MC2. One such girl corroborated the testimony given by a number of victims in their depositions, that Epstein had promised her and other underage girls modeling jobs at MC2 and Victoria’s Secret” (Location 1092 of Kindle eBook, MC2 was a modeling agency Epstein invested in).
When viewed as a mosaic, the pieces of evidence littered in news articles, books, and Epstein’s own “black book” suggest something is off about his relationship with Victoria’s Secret. If proven true that Victoria’s Secret helped Epstein find victims, the press coverage could be catastrophic for the brand.
Jeffrey Epstein and Les Wexner
Les Wexner, the 81-year-old billionaire founder/CEO of L Brands, had a long and perplexing relationship with Jeffrey Epstein starting in the late 1980s and ending around 2007. Before his sex crimes became public Wexner was liberal in his praise of Epstein, remarking in one Vanity Fair article, “[Epstein is] very smart with a combination of excellent judgment and unusually high standards. Also, he is always a most loyal friend.”
However, what Epstein exactly did for Wexner and the full extent of their relationship is still a mystery. Joe Nocera of Bloomberg published a great investigative piece on their perplexing relationship. Most alarming was Nocera’s description of a charitable transaction between Epstein and a Wexner associated foundation:
“In December 2007, a new foundation was established called the YLK Charitable Fund. It had two trustees: Wexner’s wife, Abigail, and Pegy Ugland, a longtime Wexner employee. This took place two months after Epstein had agreed to his now infamous plea deal in Florida. Few people knew about the plea, however, because the agreement was still under seal.
In January 2008 — one month later — Epstein transferred $46 million to Abigail Wexner’s new foundation, $14 million of which came from C.O.U.Q. and the rest from Epstein’s company. Among the conditions: YLK had to account for Epstein’s money “separately on its books and records.”
Just three years later, with Epstein out of prison, the YLK Charitable Fund shut down, having made exactly two donations. The money that remained — some $33 million — was then folded into yet another of Wexner’s foundations, the Wexner Family Charitable Fund.
Why would Abigail Wexner set up a foundation solely to accept money from Epstein? Why would it remain largely dormant for the next three years?”
When transactions do not make economic sense and the parties involved offer no explanation, investors should be skeptical.
Another point of puzzlement is Epstein’s New York property, 9 East 71st Street, the townhouse where Epstein is accused of committing sex crimes. Les Wexner purchased the seven-story townhouse in 1989, but Wexner decided to stay in Ohio and never fully moved in. Instead, Mr. Epstein did. Epstein claimed in a 1996 interview that the house was his. However, in a 2002 construction permit, around the time of Epstein’s abuses, Wexner was listed as the property agent.
The confusing property ownership, the baffling charitable transactions, the lack of explanations, and other oddities highlighted by Joe Nocera don’t pass the smell test.
Conclusion
At a private industry conference in April 1991, Signet CEO Gerald Ratner claimed he was able to sell jewelry for such low prices because he sold “total crap.” His comments were leaked to the press and the resulting scandal alienated customers, sent Signet stock down over 90%, and led to his resignation.
When the facts support it, scandals can cause lasting harm and ruin businesses. There are many unknowns, but I believe the evidence suggests a reasonable chance something very wrong happened at Victoria’s Secret and L Brands. The weather of today and the climate of our era are against L Brands. Investors should be skeptical.
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