Australian retail billionaire Brett Blundy’s company has been accused of corporate espionage and hiring executives with a history of sexual harassment allegations by the Victoria’s Secret board, which is fending off his bid to control the iconic lingerie brand.
In filings to the US company regulator on Tuesday morning, Victoria’s Secret directors detailed their reasons for rejecting the reclusive Australian billionaire’s bid to join them and revealed that one of their picks for board seat had withdrawn from re-election amid the brutal corporate battle.
Blundy has been seeking to remove current chair Donna James and three other directors and join the board himself, along with three handpicked nominees. A shareholder meeting to vote on the board composition is scheduled for June 11.
The Victoria’s Secret board has rejected his proposal and alleges Blundy’s investment vehicle BBRC – its second-largest investor with a 13 per cent stake – violated US security laws, and has a conflict of interest over other investments.
“After careful and extensive consideration, the board has determined in accordance with its fiduciary duties that appointing you to the board would not be in the best interests of Victoria’s Secret or its shareholders,” the lingerie company’s board said in a letter to Blundy dated late last year, which was released in the regulatory filing. “In seeking to deflect the board’s serious concerns, you have simply asserted that no allegations have been made against you or BBRC.”
The letter also cited potential risks arising from Blundy’s track record of “of hiring executives with a history of serious allegations of sexual harassment or other misconduct, and the reported and alleged instances of harassment and highly inappropriate employee policies that occurred under [his] oversight at companies [he] controlled or effectively controlled.”
It specifically mentioned allegations of misconduct and labour law violations involving two BBRC investments, ASX-listed fashion jewellery maker Lovisa and Honey Birdette, the lingerie chain which was later sold to Playboy.
In 2024, former David Jones boss Mark McInnes joined BBRC in a senior global role. McInnes was sacked by the department store operator in 2010 following allegations of inappropriate behaviour involving a female employee.
The Victoria’s Secret board also said these allegations of questionable behaviour at companies associated with Blundy gave it serious concerns over the lingerie retailer’s ability to comply with its legal obligations under the L Brands Settlement Agreement.
This is a reference to Victoria’s Secret’s landmark $US90 million ($124 million) settlement of a lawsuit regarding widespread sexual harassment and misogynistic corporate culture at the group under its previous owner, L Brands.
The board statement cited details from a meeting with Blundy in January 2024. It said his answers to vetting questions “did not adequately address the board’s concerns” but said the board did offer Blundy an alternative arrangement that would enable a deeper engagement between the two groups.
“In seeking to deflect the board’s serious concerns, you have simply asserted that no allegations have been made against you or BBRC,” the Victoria’s Secret board said, adding that it needs to ensure “that we have leaders who promote culture, policies, and procedures to prevent the attendant risks of reputational and operational harm to our business and brand”.
There is no suggestion of wrongdoing by Blundy and BBRC in relation to the harassment and other allegations mentioned. BBRC has been approached for comment.
The Victoria’s Secret board also alleged that during the three years BBRC has been required to report ownership of Victoria’s Secret stock, it has repeatedly violated US securities laws and antitrust regulations. It said that in 2023 BBRC “was required to disgorge over $US50,000”.
It also noted that in 2024, as reports emerged that Blundy was looking to launch a new global lingerie company, a senior BBRC executive visited 17 Victoria’s Secret retail stores and “attempted to gain – and in some cases succeeded in gaining – access to VS&Co confidential sales information by falsely presenting himself as being affiliated with VS&Co.”
There is no suggestion Blundy was personally involved in or aware of that executive’s conduct, and Victoria’s Secret said BBRC’s lawyers later confirmed any confidential information had been destroyed.
The following year, BBRC launched Léays Lingerie, which is the basis for the VS board’s claim that Blundy has a conflict of interest.
Earlier this month, Blundy’s BBRC directly appealed to fellow Victoria’s Secret investors with a statement filed to the US corporate regulator.
“We invested in Victoria’s Secret based on our belief in the strength of its brands and the company’s significant unrealised potential. Over time, however, we have become increasingly concerned that this potential is not being realised due to persistent shortcomings in oversight, capital allocation and governance at the board level,” the statement said.
Blundy’s investment firm said Victoria’s Secret has underperformed relative to its peers and notes the absence of a plan to close the performance gap.
“The leadership of the board must reflect fresh perspective, governance discipline and capital allocation expertise, rather than one whose tenure spans the period of the company’s relative decline,” its statement said.
“We are asking stockholders to carefully consider our case for targeted change in the boardroom and to express a clear view on accountability at the board level.”
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Colin Kruger is a senior business reporter for the Sydney Morning Herald and The Age.Connect via email.
