Victoria’s Secret Lingerie prepares to spin off from L Brands

Last week L Brands announced that it’s preparing to spin Victoria’s Secret Lingerie, which includes Pink and Victoria’s Secret Beauty, off into its own independent, publicly held company. This step allows the more successful Bath & Body Works to separate from the struggling lingerie retailer. “We believe the spin-off will enable each company to maximize management focus and financial flexibility to thrive in an evolving retail environment and to deliver profitable growth,” said Andrew Meslow, chief executive officer of L Brands and Bath & Body Works.

“In the last 10 months, we have made significant progress in the turnaround of the Victoria’s Secret business, implementing merchandise and marketing initiatives to drive top line growth, as well as executing on a series of cost reduction actions, which together have dramatically increased profitability,” Sarah Nash, chair of the L Brands board, said in a statement. “Ultimately,” the statement continued, “the board concluded that the spin-off of Victoria’s Secret into a separate, public company would provide shareholders with more value than a sale.” The tax-free spin-off is slated to be completed in August 2021.

L Brands was exploring potential buyers for Victoria’s Secret after a sale to Sycamore Partners, a private equity firm, fell through as a result of the pandemic last year. The transaction would have valued the lingerie brand at about $1.1 billion.  Victoria’s Secret, known for its lingerie, swimwear and annual fashion show, has struggled in recent years with increased competition from retailers like Aerie catering to a similar demographic of shoppers, as well as some very public snafu’s by now former-executives accused of sexual harassment and policies revealing their, um, UNinclusivity when it comes to their choice of models. Last year, the company canceled its famously televised fashion show, where supermodels like Heidi Klum, Kendall Jenner, Gigi Hadid and Adriana Lima have been known to walk the runway.

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