L Brands Spinning Off Victoria’s Secret
Victoria’s Secret is going it alone.
After exploring a sale, parent company L Brands Inc. said it was planning a tax-free spinoff of the lingerie giant in August, a move that will separate the Victoria’s Secret and Bath & Body Works businesses.
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Sarah Nash, chair of L Brands, said: “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 topline growth, as well as executing on a series of cost reduction actions, which together have dramatically increased profitability. As a result of these efforts, Victoria’s Secret is now well positioned to operate as a stand-alone, public company.
“Further, both Bath & Body Works and Victoria’s Secret are leaders in their respective markets, and, as separate businesses, each will be ideally positioned to benefit from a sharpened focus on pursuing growth strategies best suited to each company’s customer base and strategic objectives,” she said. “With this in mind, the board believes that this path forward will return the highest value to shareholders and that the separation will allow each business to achieve its best opportunities for growth.”
Martin Waters will continue to lead Victoria’s Secret as chief executive officer after the separation.
L Brands also said it expects to report operating income of $245 million for Victoria’s Secret for the first quarter. Bath & Body Works, which will continue to be led by Andrew Meslow as CEO, is expected to report operating income of $380 million.
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