Victoria’s Secret eyes IPO as business stages a comeback

Victoria’s Secret is getting spun off by its proprietor into a separate, publicly traded firm as its once-battered business has bounced again throughout the pandemic.

L Brands, which had put Victoria’s Secret on the block earlier this 12 months, mentioned Tuesday that it’ll stage an preliminary public providing for the bra-and-panties empire by August after turning away gives from “multiple potential buyers” that fell wanting expectations. 

“Ultimately, the board concluded that the spin-off of Victoria’s Secret into a separate, public company would provide shareholders with more value than a sale,” L Brands mentioned in a assertion.

Analysts now say Victoria’s Secret, together with its teen-focused Pink chain, might be valued at upwards of $5 billion in an IPO. As beforehand reported by The Post, analysts have quietly but dramatically increased their estimates of the brand’s worth as it has revamped itself throughout the pandemic.

That’s even if early final 12 months, the 43-year-old lingerie label had scored a valuation of slightly below $1 billion in a deal to promote itself to Sycamore Partners. The personal fairness agency had agreed to take a 55-percent stake within the lingerie firm for $525 million, but reneged on its offer shortly after the pandemic began.

Les Wexner
Former Victoria’s Secret CEO Les Wexner

Management has carried out a tough-love turnaround technique for Victoria’s Secret, closing shops and discounting much less. It additionally opened its doors wide for new customers, including curvy and plus-size consumers who had beforehand been shunned by chain.

In the method, it deemphasized attractive lingerie, including extra exercise gear and cozy garments like sweatpants and pajamas to its assortment. It additionally employed extra curvy fashions like Candice Huffine and Devyn Garcia, even as it has slashed prices and put a lid on discounting.

“Victoria’s Secret made the very difficult decision to proactively pull back on promotions, even though that would likely mean walking some customers out the door,” BMO analyst Simeon Siegel informed The Post. “They recognized that by selling less, they could charge more and return the business to profitability, an outcome we have been watching play out over the course of the pandemic.”

It additionally shed administration who’d been accused of fostering a sexist model picture whereas its longtime chairman and chief government, Les Wexner, stepped away from the company following a sequence of embarrassing tales about his business ties to the late pedophile, Jeffrey Epstein.

After raising its profit outlook twice throughout the first quarter, L Brands on Tuesday once more hiked its earnings forecast, citing “significant improvement” at Victoria’s Secret. The firm now expects first-quarter earnings of $1.25 a share, up from its earlier outlook of 85 cents to $1 a share.

Bath & Body Works store
L Brands Chief Executive Andrew Meslow will lead Bath & Body Work underneath the brand new spinoff plan.
Getty Images

“In the last 10 months, we have made significant progress in the turnaround of the Victoria’s Secret business,” Sarah Nash, chair of the board mentioned in a assertion.

The deal that appears poised to lastly dissolve a decades-old conglomerate based by billionaire Wexner — whose earlier spinoffs included Abercrombie & Fitch. Victoria’s Secret will separate from its final company sibling, the mall-based Bath & Body Works chain. Both retailers will function independently after the spinoff.

The board-approved spinoff plan requires L Brands Chief Executive Andrew Meslow to guide Bath & Body Works and for the present chief government of Victoria’s Secret, Martin Waters, to proceed in that position, the corporate mentioned.

Shares of L Brands, which have surged 66 p.c this 12 months, lately had been off 4.6 p.c at $65.63 on Tuesday.

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