COLUMBUS, Ohio (WCMH) — L Brands announced plans Tuesday, to spin Victoria’s Secret as well as Bath & Body Works into their own separately traded companies.
In a statement released from the L Brands Board of Directors, the company announced they would be turning the retailers into two independent, public companies.
“The company expects to create these companies through a tax-free spin-off of Victoria’s Secret to L Brands’ shareholders. The spin-off will enable each company to maximize management focus and financial flexibility to thrive in an evolving retail environment and deliver profitable growth,” the statement reads.
“In the last ten 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,” said Sarah Nash, Chair of the Board. “As a result of these efforts, Victoria’s Secret is now well-positioned to operate as a standalone, public company. Further, both Bath & Body Works and Victoria’s Secret are leaders in their respective markets, and, as separate businesses, each will be ideally positioned to benefit from a sharpened focus on pursuing growth strategies best suited to each company’s customer base and strategic objectives. With this in mind, the Board believes that this path forward will return the highest value to shareholders and that the separation will allow each business to achieve its best opportunities for growth.”
The board had been looking at the possibility of selling off Victoria’s Secret, according to the release, but the board decided making it a publicly traded company would provide shareholders with more value than a sale.
The transaction is expected to be complete by August 2021.