After turning down offers for Victoria's Secret it deemed too low, L Brands is spinning off the business into a public company. The spinoff is expected to be completed in August, and it will separate Victoria's Secret from the Bath & Body Works banner. Victoria's Secret CEO Martin Waters will remain in his post, now leading a standalone company.
Less than a year ago, L Brands agreed to sell a majority stake in Victoria's Secret to private equity firm Sycamore Partners for roughly $525 million – far less than the more than $3 billion bids L Brands reportedly turned down in recent weeks. Sycamore backed out, but L Brands is now certain that Victoria's Secret will be valued at between $5 billion and $7 billion.
"[T]he 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," Board Chair Sarah Nash said in a statement, noting that the brand has become more profitable via merchandise upgrades and cost cuts.