Victoria's Secret goes private in a $525 million deal
New York [USA], Feb 21 (ANI): Victoria's Secret, the troubled lingerie brand owned by L Brands, is being sold to a private equity firm in a 525 million dollar deal.
ANI
Feb 21, 2020 14:34 IST
New York [USA], Feb 21 (ANI): Victoria's Secret, the troubled lingerie brand owned by L Brands, is being sold to a private equity firm in a 525 million dollar deal.
According to CNN, Sycamore Partners and L Brands will split control of the brand. The private equity firm is buying a 55 per cent stake while L Brands is taking control of the remaining 45 per cent. But Victoria's will be spun off into a fully private company.
Leslie Wexner, the 82-year-old billionaire who has run L Brands for several decades, is leaving his position as CEO and Chairman as part of the transaction. He will remain on L Brands' board as Chairman Emeritus.
In a statement, Wexner said that separating Victoria's Secret into a privately held company "provides the best path to restoring these businesses to their historic levels of profitability and growth."
Victoria's Secret has been struggling over the years because it failed to adapt to consumer demand for more custom-fitted bras and inclusive messaging in its advertisements.
Although marketing trends in lingerie have changed, Victoria's Secret has mostly stuck to the same playbook that helped it dominate the industry: push-up bras and celebrity models.
The brand was also the focus of a New York Times expose earlier this month that alleged mistreatment against its models.
"The separation will enable L Brands to reduce debt and focus on its strong core business of Bath & Body Works, which represents over 80 per cent of its operating income," said Moody's Vice President Christina Boni in a note to investors.
"The transaction combined with cash on its balance will result in estimated debt reduction about one billion dollars and mitigates the risk associated with the turnaround of Victoria's Secret business," she added.
(ANI)
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