L Brands will spin off Victoria's Secret as a separate, publicly traded company rather than sell it, the company announced Tuesday.
The plan will separate Victoria’s Secret and Bath & Body Works into two publicly traded companies in a tax-free spin-off slated to be completed in August 2021.
"In the last 10 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," Sarah Nash, chair of the L Brands board, said in a statement.
"Ultimately," the statement continued, "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 was exploring potential buyers for Victoria’s Secret after a sale to Sycamore Partners, a private equity firm, fell through as a result of the pandemic last year. The transaction would have valued the lingerie brand at about $1.1 billion.
Victoria’s Secret, known for its lingerie, swimwear and annual fashion show, has struggled in recent years with increased competition from retailers like Aerie catering to a similar demographic of shoppers. Last year, the company canceled its televised fashion show, where supermodels like Kendall Jenner, Gigi Hadid and Adriana Lima have been known to walk the runway.
L Brands shuttered hundreds of Victoria’s Secret locations across the country and Canada in the last year.