L Brands to Sell Controlling Stake in Victoria’s Secret Brand to Sycamore | Financial Buzz

L Brands to Sell Controlling Stake in Victoria’s Secret Brand to Sycamore

Today, L Brands, Inc. (NYSE: LB) announced together with Sycamore Partners to sell a majority of 55% interest in Victoria’s Secret Lingerie, Victoria’s Secret Beauty and Pink to the private equity company, that focuses on consumer and retail investments, for approximately USD 525 million. L Brands will retain 45% in minority stake.

The Company declared a total enterprise value of USD 1.1 billion for the Victoria’s Secret brand, that will be separated from L Brands into a privately-held company. Sales of the brand were decreasing since 2017.

L Brands further published that Bath & Body Works now becomes the Company’s main focus and is expected to grow into a successful standalone public company.

Allan Tessler, lead independent Board director, said: “The Board undertook a comprehensive review of a broad range of options to best position its brands for long-term success and drive shareholder value. As the Board and its advisers explored these potential alternatives, we received valuable input from a number of shareholders, and we greatly appreciate their support. We are confident that this transformative transaction is the best path forward to strengthen our iconic brands and deliver enhanced value to all L Brands shareholders.”

Upon the closing of the transaction, L Brands also disclosed that Leslie H. Wexner, the Chairman and CEO of L Brands will step down to become Chairman Emeritus. Wexner came under pressure in the last 18 months, when he failed to adapt the Victoria’s Secret brand to changing market conditions and further was said to be involved in sexual harassment at the Company.

“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,” stated Leslie Wexner, Chairman and Chief Executive Officer of L Brands.

Andrew Meslow was promoted to Chief Executive Officer of Bath & Body Works, will take Wexner’s place as the CEO of L Brand and join its Board of Directors.

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