Dive Brief:
L Brands on Tuesday said that, after entertaining interest from several potential buyers, its board instead unanimously approved a tax-free spinoff of its Victoria s Secret business into a public company apart from its Bath & Body Works banner. The separation is expected to be completed in August, according to a company press release.
L Brands CEO Andrew Meslow will retain that position and lead Bath & Body Works following the spinoff. Victoria s Secret CEO Martin Waters will continue to lead the stand-alone Victoria s Secret business, which includes the namesake brand and Pink.
The conglomerate released preliminary first quarter results, reporting an overall 83% net sales rise to $3 billion, reflecting a 93% increase to $1.5 billion at Bath & Body Works and a 74% increase to $1.6 billion at Victoria s Secret. Comps rose 21%; 16% at Bath & Body Works and 25% at Victoria s Secret. L Brands operating income reached about $570 million $380 million at Bath & Body Works
Jim Cramer: What Victoria s Secret Spinoff Says About Investors
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L Brands (
LB) - Get Report will spin off Victoria s Secret and Bath & Body Works as two separate publicly-traded companies.
Victoria s Secret will be run by CEO Martin Waters, while L Brands CEO Andrew Meslow will lead Bath & Body Works, the company said, with plans to complete the tax-free separation by August of this year. The New York Times DealBook reported that L Brands had received offers higher than $3 billion for Victoria s Secret, but expects a spin-off value approaching $7 billion from its planned transaction.
Jim Cramer explains what he does and doesn t like about this news in the video above.
Associated Press
In this April 4, 2018, file photo, shoppers walk past the Victoria s Secret store on Broadway in the Soho neighborhood of New York.
Columbus-based L Brands announced it will separate the company into two independently-run, public companies Victoria’s Secret will stand alone and Bath & Body Works will remain under L Brands.
The move comes a year after an agreement to sell Victoria’s Secret fell apart as the pandemic emptied malls nationwide.
L Brands has been shopping the struggling chain elsewhere since the collapse of that deal and said it had held talks with a number of potential buyers, but it appears it could not come to an agreement on price.
Columbus-based L Brands will spin off Victoria s Secret from Bath & Body Works
BLOOMBERG
A Victoria s Secret store
Columbus-based L Brands Inc. (NYSE: LB), which had been mulling either a split or sale for its Victoria s Secret chain, has opted to go the spinoff route, announcing on Tuesday, May 11, plans to separate into two publicly traded companies.
The transaction, which is expected to be completed in August, will result in two independent retailers: Bath & Body Works and Victoria s Secret. The split will let the separate companies better focus on growth and give more financial flexibility in a changing retail landscape, L Brands said.
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