L Brands receives bids for Victoria’s Secret but prefers a spin-off
New stand-alone lingerie business is expected to offer more value to shareholders than a sale
Praveen ParamasivamPicture: REUTERSBengaluru — L Brands said on Tuesday it plans to spin off its Victoria’s Secret business into a stand-alone company, capping a year of weighing strategic options for the brand, including a sale.
The Ohio-based company held talks with multiple interested buyers while reviewing its lingerie line but concluded that a spin-off would offer more value to its shareholders than a sale.Victoria’s Secret went under review after a failed attempt to sell a majority stake to buyout firm Sycamore in 2020, when the brand had to close shops and furlough staff to cope with the Covid-19 crisis.
The New York Times’s DealBook division earlier on Tuesday reported that L Brands received several bids over $3bn for Victoria’s Secret, but the offers did not match what it expects to get in a spin-off.Victoria’s Secret expects to be valued between $5bn and $7bn in a spin-off to L Brands shareholders, the New York Times report said. headtopics.com
L Brands did not respond to a Reuters request for comment on the valuation of the brand.After the company splits into two public units — Bath & Body Works and Victoria’s Secret — L Brands top boss Andrew Meslow will lead the personal care brand while Victoria’s Secret chief Martin Waters will head the new stand-alone lingerie business. The deal is expected to close in August.
L Brands also expects sales for the first quarter ended May 1 to be $3.02bn, up from $1.65bn a year earlier, with revenue growth across both banners. Analysts on average expect net sales of $2.89bn, according to IBES data from Refinitiv.The company also expects to report adjusted earnings per share of about $1.25, up from its prior range of 85c to $1.
Shares in L Brands fell 2.6% in premarket trading on Tuesday. Read more: Business Day »
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