(Filed Under wholesale Lingerie News). L Brands announced today that it will separate into two independent, public companies: Bath & Body Works and Victoria’s Secret, the latter to include Pink. The move is expected to be completed by August.
L Brands had previously discussed the possibility of either a spin-off or sale of its lingerie brands, with its financial advisors, Goldman Sachs and JP Morgan, exploring the options. “Throughout the review process, the company received interest from and held discussions with multiple potential buyers. 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.”
Martin Waters, currently CEO of the Victoria’s Secret lingerie division “will continue to lead the new standalone Victoria’s Secret business following the separation.”
As it announced the split, L Brands revealed that comparable sales for its Victoria’s Secret and Pink company-operated stores in the U.S., Canada and Greater China, as well as its direct sales for the two brands, had jumped 25% in the first quarter of 2021.
Total sales for all the lingerie businesses in the first quarter rose to $1.5542 billion, up from $893.6 million in the same three months last year. (Sales include all the store and direct business in the U.S. and Canada, as well as Greater China and royalties associated with franchised stores and wholesale sales). In the first quarter of 2019 total Victoria’s Secret sales were $1.6704 billion.
While L Brands will not publish its complete first quarter results until May 19, it said it “expects to report first quarter earnings per share of approximately $0.97,” and “expects to report total operating income of approximately $570 million, including approximately $380 million at Bath & Body Works and approximately $245 million at Victoria’s Secret.”
As of May 1, the fleet of lingerie stores had been reduced to 698 Victoria’s Secret and 143 Pink stores in the U.S. As of the same date there were 24 Victoria’s Secret and two Pink stores in Canada. In addition the company operated 36 Victoria’s Secret Beauty and Accessories shops (which offer a limited selection) as well as 26 full service Victoria’s Secret stores in Greater China.
“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, chairman. “As a result of these efforts, Victoria’s Secret is now well-positioned to operate as a standalone, public company.”
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