L Brands Targets August for Separation of Victoria’s Secret
(Bloomberg) -- L Brands Inc. intends to sell or spin off Victoria’s Secret by August as the company works to separate its beleaguered lingerie chain from the growing Bath & Body Works business. The shares climbed.
The company hasn’t determined the exact method for the split, but said Thursday that it’s reviewing “all options, including a spin-off of the Victoria’s Secret business into a public company or a private sale of the business.” The more-specific timeline comes after the board met with its financial advisers in January, L Brands said.
Chief Financial Officer Stuart Burgdoerfer will also retire, the company said, although he will stay on to oversee the separation process. The company has promoted Martin Waters, head of Victoria’s Secret Lingerie, to take over as chief executive officer of the brand -- a role that Burgdoerfer was filling on an interim basis.
The split of Victoria’s Secret, which has struggled with changing consumer tastes, from Bath & Body Works, which is capitalizing on heavy demand for soap and hand sanitizer during the pandemic, has been a long-stated goal for the company. L Brands has faced management upheaval and saw a transformational deal unravel amid Covid-19.
L Brands also boosted its fourth-quarter earnings guidance to $2.95 to $3 a share due to “strong January results.” That’s up from a prior range of $2.70 to $2.80. It expects the key metric of same-store sales will rise 10% for the period -- climbing 22% for Bath & Body Works and falling 3% for Victoria’s Secret.
L Brands shares jumped as much as 5.6% Thursday in New York.
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