A year after a deal to sell Victoria's Secret did not materialize as the pandemic kept customers away from malls, the chain will be spun off by its owner to become a separate company.
The transaction, set to be finalized in August, will see the creation of two independent publicly listed companies: Victoria's Secret and Bath & Body Works.
In a statement, L Brands said the split will enable the companies to focus more on growth and financial flexibility in a fast-changing retail market.
Victoria's was to be sold to Sycamore Partners in 2020 for around $525 million, but the private equity company sued to withdraw from the deal citing the pandemic. During that time, Victoria's Secret had no other option but to shut its shops and sales, which had been plunging as the brand lost its appeal.
"Perhaps no brand has transformed its fundamental earnings power and outlook more over the course of the pandemic" than Victoria's Secret, The New York Times quoted analysts at Evercore as saying, recently.
The lingerie chain had revived talks with buyers about a potential sale, seeking around $1.1 billion value it had last year in a failed deal, according to Bloomberg News.
Earlier Tuesday, The Times said while L Brands received several offers of more than $3 billion, the company turned them down to pursue a spinoff that would value it at between $5 billion and $7 billion.
L Brands did not immediately respond to a request for comment by Reuters on the valuation of the brand.
After the company splits into two public entities, L Brands chief executive Andrew Meslow will lead the personal care brand while Victoria's Secret chief executive Martin Waters will head the new independent lingerie business.
