L Brands to Spin Off Victoria’s Secret Into Separate Company

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L Brands, the retail company founded by billionaire Les Wexner, will spin off Victoria’s Secret and Bath & Body Works into separate public companies, the company announced on Tuesday.

The move comes after L Brands was seeking a buyer for Victoria’s Secret, which has struggled after scandals and declining sales. However, the company decided to spin off the retailer after bids came in much lower than expected, The New York Times reported.

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Sarah Nash, chair of L Brands’ board, said in a statement that the split “will allow each business to achieve its best opportunities for growth” and give both brands more flexibility. As part of the deal, expected to close in August, Andrew Meslow will remain CEO of L Brands and lead Bath & Body Works, while Martin Waters will head Victoria’s Secret.

Victoria’s Secret failed in recent years to adapt to online sales and more inclusive messaging, and also faced sexual harassment and misogyny accusations among its staff and Wexner’s close ties with sex offender Jeffrey Epstein. Wexner stepped down from his post last year.

L Brands tried to offload Victoria’s Secret to Sycamore Partners last year for $1.1 billion, but the deal fell through once the coronavirus pandemic hit, the Times reported.

It started to see if it could find another private equity buyer for the lingerie retailer earlier this year. L Brands received bids for a bit more than $3 billion, but turned them down because it expects the retailer to be valued between $5 to $7 billion in the spinoff, according to the Times.