L Brands to separate Victoria’s Secret and Bath & Body Works
L Brands has announced that Victoria’s Secret and Bath & Body Works are to separate into two independent public companies.
The companies will be created through a tax-free spin-off of Victoria’s Secret to L Brands’ shareholders.
As previously announced, the L Brands board has been considering either a spin-off or sale of Victoria’s Secret with input from its financial advisors Goldman Sachs and JP Morgan. While it has held talks with several potential buyers, it has now decided that a spin-off of Victoria’s Secret will provide shareholders with more value than a sale.
Sarah Nash, L Brands chair, said: “In the last ten 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.
“As a result of these efforts, Victoria’s Secret is now well-positioned to operate as a standalone, 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.”
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