L. Brands to Sell Controlling Stake in Victoria’s Secret

In an effort for Victoria’s Secret to repair its struggling image and sales, parent company L Brands Inc. is selling a controlling stake in the company to Sycamore Partners. The transaction values Victoria’s Secret at about $1.1 billion.

As part of the deal, Sycamore Partners will buy 55% in the lingerie chain and take it private, leaving L Brands with a minority stake. L Brands’ founder Leslie Wexner will also step down as its chairman and chief executive officer.

“I think about the endless possibilities ahead for this company. And I’ve thought about where I fit in the picture,” Wexner said in a message to employees seen by Bloomberg News. “In keeping with this same thoughtful examination, I have decided that now is the right time to pass the reins to new leadership.”

Wexner has said, “We believe the separation of Victoria’s Secret Lingerie, Victoria’s Secret Beauty and PINK into a privately held company provides the best path to restoring these businesses to their historic levels of profitability and growth. Sycamore, which has deep experience in the retail industry and a superior track record of success, will bring a fresh perspective and greater focus to the business. We believe that, as a private company, Victoria’s Secret will be better able to focus on longer-term results. We are pleased that, by retaining a significant ownership stake, our shareholders will have the ability to meaningfully participate in the upside potential of these iconic brands.”

“We have long had great respect and admiration for L Brands and its success in building a world-class portfolio of lingerie and beauty brands,” said Stefan Kaluzny, Managing Director of Sycamore Partners. “With unmatched global brand awareness and customer loyalty, we believe there is a significant opportunity to reinvigorate growth and improve the profitability of Victoria’s Secret. We look forward to partnering with the leadership team to pursue these objectives.”

Disclaimer: We have no position in L Brands Inc. (NYSE: LB) and have not been compensated for this article.