THE WHAT? L Brands has announced that it has sold a 55 percent stake in Victoria’s Secret Lingerie, Victoria’s Secret Beauty and Pink to Sycamore Partners. The deal gives the brand a total enterprise value of US$1.1 billion.
THE DETAILS L Brands will retain a 45 percent stake in the famous underwear brand and, upon closing, Leslie H Wexner will step down as Chairman and CEO in favor of a Chairman Emeritus role.
Meanwhile, L Brands’ other big name, Bath & Body Works is to become a focused, standalone public company, with Andrew Meslow promoted to CEO. Upon closing of the transaction, Meslow will be appointed CEO of L Brands and join its board.
Leslie Wexner, Chairman and Chief Executive Officer of L Brands, stated, “We believe this structure will allow Bath & Body Works – which represents the vast majority of 2019 consolidated operating income – to continue to achieve strong growth and receive its appropriate market valuation. The transaction will also allow the company to reduce debt.”
THE WHY? The strategic transaction is designed to deliver long term value to L Brands shareholders by positioning Bath & Body Works as a standalone public company and separating the ailing Victoria’s Secret out into a privately-held entity.