Columbus, Ohio — The board of directors for L Brands Inc. has unanimously approved a plan to separate the company into two independent, public companies consisting of Bath & Body Works and Victoria’s Secret. L Brands expects to create these companies through a tax-free spinoff of Victoria’s Secret to the shareholders of L Brands.
“The spinoff will enable each company to maximize management focus and financial flexibility to thrive in an evolving retail environment and deliver profitable growth,” L Brands stated in a news release. As separate businesses, each will benefit from a sharpened focus on pursuing growth strategies best suited to each company’s customer base and strategic objectives, adds Sarah Nash, chair of the board for L Brands.
The Columbus, Ohio-based retailer had been evaluating the possibility of either a spinoff or a sale of Victoria’s Secret with input from its financial advisors, Goldman Sachs and JP Morgan. Ultimately, the board decided that the spinoff would provide shareholders with more value than a sale. The transaction is expected to close in August.
L Brands reported net sales of $3 billion for the first quarter of the company’s 2021 fiscal year that ended May 1, compared with $1.6 billion during the same period a year ago. L Brands operates 2,681 stores in the United States, Canada and China. The company’s stock price opened at $67.38 per share Tuesday, May 11, up from $11.53 per share 1 year ago.
SOURCE: www.REBusinessOnline.com