L Brands to spin off Victoria’s Secret despite several bids of more than $3bn

L Brands said on Tuesday planned to spin off its Victoria ’it s Secret business into a standalone company, capping a year of weighing strategic options for the brand, including a sale.

The Ohio-based company held talks with 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 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.

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.

VALUATION

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.

VICTORIA’S SECRET WENT UNDER REVIEW AFTER A FAILED ATTEMPT TO SELL A MAJORITY STAKE TO BUYOUT FIRM SYCAMORE IN 2020