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L Brands to Spin Off Victoria’s Secret

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L Brands’ board had evaluated the possibility of either a spinoff or sale of Victoria’s Secret.



Photo:

Luke Sharrett/Bloomberg News

L Brands Inc.

LB -1.77%

said it is spinning off Victoria’s Secret to its existing shareholders, a coda in the company’s review process for the lingerie brand after longtime company leader

Leslie Wexner

stepped aside as chief executive last year.

The move, which the company had signaled, will result in the lingerie chain and the faster growing Bath & Body Works operating as two publicly traded companies. It comes after the company’s board evaluated the possibility of either a spinoff or sale of Victoria’s Secret.

The Columbus, Ohio-based company said the separation would give each company financial flexibility. It said it expects the spinoff to qualify as tax-free to L Brands and its shareholders for U.S. federal income-tax purposes.

L Brands Chief Executive

Andrew Meslow

will serve as CEO of Bath & Body Works after the spinoff, the company said. Victoria’s Secret CEO

Martin Waters

will continue leading the stand-alone business after the separation, L Brands added.

The company said additions to the management teams and compositions of the boards for both companies will be named at a later date.

L Brands said it expects the transaction to close in August.

L Brands spoke to potential buyers for Victoria’s Secret this year, according to people familiar with the matter, but didn’t reach a deal for the lingerie business that was once its biggest brand.

In February 2020, L Brands struck a deal to sell a majority stake in Victoria’s Secret to Sycamore Partners for about $525 million. The deal unraveled a few months later after the Covid-19 pandemic closed many stores and disrupted retailers.

The company also said it expects to turn a profit for the first quarter and post higher sales, driven by stimulus payments and the relaxation of Covid-19 restrictions. In the prior-year quarter, the company saw sales being hit by the closure of stores for about half the quarter due to the pandemic.

Victoria’s Secret became a powerhouse lingerie retailer thanks to the vision of executives at its parent company. But amid changing consumer tastes, sexual-harassment accusations and ties to Jeffrey Epstein now under scrutiny, the once-iconic brand’s stock has been tumbling and it has signaled it may be looking for a buyer. Photo: Getty Images (Video from 2/14/20)

Write to Dave Sebastian at dave.sebastian@wsj.com

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the May 12, 2021, print edition as ‘Victoria’s Secret Spinoff Planned.’

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