May refused the request of Mark Weikel, former chairman of Foley’s, for permission to accept a job offer at Victoria’s Secret, citing a noncompete clause in Weikel’s contract. Foley’s officials escorted Weikel from the division’s Houston offices June 9, shortly after Weikel told Drew Pickman, Foley’s chief executive, about the offer, according to the lawsuit, which was filed the same day in St. Louis County Circuit Court. Victoria’s Secret and Weikel ask in the lawsuit for Weikel to be allowed to accept the position and for unspecified damages.
May announced in a press release June 10 that Andrew Hall, Foley’s senior vice president and chief financial officer, is replacing Weikel. Sharon Bateman, a spokeswoman for May, declined to comment.
Victoria’s Secret is seeking a court date on or before Aug. 10 to allow Weikel to start work at the company quickly, said William Corrigan, a partner with Armstrong Teasdale LLP and the lead attorney representing Victoria’s Secret. Weikel’s attorney, John Gianoulakis, partner at Kohn, Shands, Elbert, Gianoulakis & Giljum LLP, said Victoria’s Secret and Weikel “merely exercised their legal right” to have the court declare the two companies are not competitors. Weikel could not be reached for comment.
Weikel cannot move to a competitor within two years of employment at May, according to his employment contract included as an exhibit in the lawsuit. Corrigan said, however, that Victoria’s Secret is not a competitor to May. Victoria’s Secret, owned by Limited Brands, is a retailer of private-brand lingerie, as compared to May, a full-line department store company that sells everything from china and furniture to jewelry, the suit said. A spokesman for Weikel Limited Brands did not return phone calls.
The position offered to Weikel at Victoria’s Secret is not named in the lawsuit, but an industry source said it was a high-level position with Victoria’s Secret stores. Weikel was making $500,000 annually at May; a standard increase for a move in the industry is 10 percent to 20 percent over the executive’s current salary, said Terre Simpson, president of New York-based Simpson Associates, a retail executive search firm. That would put Weikel’s new salary in the $550,000 to $600,000 range.
Salaries for the top five executives at Limited Brands, a Columbus, Ohio-based fashion retailer that also operates the Limited, Express and Bath & Body Works, ranged between $523,558 and $1.5 million in 2002, according to the company’s proxy filing with the Securities and Exchange Commission.
Weikel signed a three-year contract with May in 2000 for a $425,000 salary. The contract was extended by two years, and Weikel’s salary was raised in 2002. In addition to his salary, Weikel received a special bonus of $50,000, which Weikel would “earn out” by April 30. If Weikel’s employment with May ended prior to that date, he would have to repay that money. Weikel also was to receive 12,000 shares of restricted stock in May by 2006.
Limited Brands reported that same-store sales for the year ended Feb. 1 increased 3 percent, to $8.4 billion. Same-store sales for Victoria’s Secret rose 6 percent for the year. May’s same-store sales were down 2.8 percent for the year, to $13.5 billion. Sales for Foley’s, which operates 67 stores, declined from $2.1 billion in 2001 to about $2 billion in 2002.
In addition to Corrigan, Victoria’s Secret is being represented by Michael Kass at Armstrong Teasdale, and Weikel¹s attorneys include John Klobasa and David Castleman at Kohn, Shands, Elbert, Gianoulakis & Giljum. |
