L Brands to sell 55% stake in Victoria’s Secret; funds to reduce debt

By Devika Patel

Knoxville, Tenn., Feb. 20 – L Brands, Inc. plans to use the proceeds it raises from a planned transaction, along with about $500 million in excess balance sheet cash, to reduce debt at Bath & Body Works.

Under the terms of the transaction, Victoria’s Secret Lingerie, Victoria’s Secret Beauty and PINK, or collectively the Victoria’s Secret brands, with a total enterprise value of $1.1 billion, will be separated from L Brands into a privately-held company majority-owned by Sycamore Partners.

Sycamore will purchase a 55% interest in the Victoria’s Secret brands for about $525 million. L Brands will retain a 45% stake in the Victoria’s Secret brands to enable its shareholders to meaningfully participate in the upside potential of these businesses.

“We believe this structure will allow Bath & Body Works – which represents the vast majority of 2019 consolidated operating income – to continue to achieve strong growth and receive its appropriate market valuation,” chairman and chief executive officer Leslie Wexner stated in a press release.

“The transaction will also allow the company to reduce debt,” Wexner stated.

Based in Columbus, Ohio, L Brands owns the Victoria’s Secret, PINK and Bath & Body Works brands.

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