L Brands set to sell Victoria’s Secret for over $1 billion

L Brands set to sell Victoria’s Secret for over $1 billion

The FINANCIAL -- L Brands reportedly is close to a deal to sell control of Victoria’s Secret to Sycamore Partners. L Brands is expected to keep a 45 per cent stake in the separate company, which will include the Pink chain. Meantime, hundreds of Victoria’s Secret bras have reportedly been found discarded in a bin close to a closed branch of the lingerie store in Colorado.

Mr. Wexner, 82, is the longest-serving chief executive in the S&P 500. He turned Victoria’s Secret into the world’s most recognizable lingerie brand before facing serious questions about his leadership based on the company’s internal culture and his relationship with the disgraced financier Jeffrey Epstein, The New York Times Reported.

L Brands, the struggling retailer's parent company, is expected to sell the lingerie brand to a private-equity company as early as Thursday, The Wall Street Journal reported late Wednesday. The paper, citing unnamed sources, said the deal valued Victoria's Secret at $1.1 billion. Victoria's Secret has had some recent struggles. Last November, the annual Victoria's Secret Fashion Show was canceled after the company had announced in May it was going to "re-think" the show. Then in early February, the New York Times detailed accusations of "misogyny, bullying and harassment" within the company, USA Today.

Sycamore Partners is expected to buy 55 per cent of Victoria’s Secret and take the struggling business private. L Brands is expected to keep a 45 per cent stake in the separate company, which will include the Pink chain. After shedding several brands in recent years, L Brands’ operations would be reduced to running the Bath & Body Works chain, according to The Australian.

Just last week, L Brands stock jumped on earlier media reports about the deal, adding 2.1%. Bloomberg News reported that MKM analyst Roxane Meyer wrote Victoria's Secret could fetch anywhere from $2 billion to $3.4 billion, and L Brands could use the cash to pay down its nearly $5.5 billion debt, as reported by The Street.

In February 2019, was announced that 53 Victoria's Secret stores would be closing down. The lingerie brand cited a "decline in performance" as the reason for the closures.

Last year L Brands chief marketing officer Edward Razek resigned. Also, Victoria’s Secret CEO Jan Singer left suddenly in 2018 and was replaced by former Tory Burch president John Mehas, CNBC wrote.

Lately, hundreds of Victoria’s Secret bras have reportedly been found discarded in a bin close to a recently closed branch of the lingerie store in Colorado. The discovery comes at a time when the fashion industry is under fire for generating significant levels of waste, while Victoria’s Secret continues to face criticism regarding recent controversies, The Guardian reported.

Throwing or incinerating inventory that can't be sold but could be donated is a big issue in the retail sector and stores often resort to extremes measures such as these to protect their brand image. Nike, H&M, Burberry, and Eddie Bauer are among the major brands to have been called out for this in the past and were slammed for resorting to such un-environmentally friendly practices especially given that fashion is one of the most polluting industries, Business Insider wrote.

Author: The FINANCIAL


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