L Brands has decided to spin off Victoria's Secret into a separate public company rather than sell it.
The retailer said Tuesday that it has opted against selling the brand even though it received interest from several potential buyers. Spinning off Victoria's Secret will create more value for shareholders, the company said.
The announcement concludes what has been a drawn-out process for L Brands deciding what to do with the lingerie brand. Its other brand is Bath & Body Works.
L Brands had announced a year ago plans to sell a 55% stake of Victoria's Secret for $525 million, but the deal was called off later as COVID-19 put operations of many retailers on hold.
Meanwhile, L Brands said it has made improvements to Victoria's Secret, which has struggled under the weight of the #MeToo era. Customers who found the retailer’s hypersexual emphasis offensive have moved to other lingerie brands.
“In the last 10 months, we have made significant progress in the turnaround of the Victoria’s Secret business, implementing merchandise and marketing initiatives to drive top line growth as well as executing on a series of cost reduction actions, which together have dramatically increased profitability,” Sarah Nash, L Brands' board chairwoman, said in a statement. “As a result of these efforts, Victoria’s Secret is now well-positioned to operate as a standalone public company."
