May 11, 2021 at 03:58PM

L Brands’ board of directors has unanimously given the go-ahead to a plan to split the firm into two public and independent companies: Victoria’s Secret and Bath & Body Works. Management said the firm anticipates the separation to occur by way of a “tax-free spin-off” of Victoria’s Secret to investors in L Brands, according to a Tuesday (May 11) announcement.

The board of L Brands had been looking into the potential sale or spin-off of Victoria’s Secret with feedback from its financial advisors. L Brands said it garnered interest from and conducted talks with different possible acquirers during the review process. However, in the end, the board decided that the spin-off of Victoria’s Secret into a different, public company would offer more value to investors than a sale.

“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 board, said in the announcement. “As a result of these efforts, Victoria’s Secret is now well-positioned to operate as a standalone, public company.”

Victoria’s Secret is an iconic worldwide brand of women’s intimates and other clothing, beauty personal care and beauty merchandise. It sells brands under the Victoria’s Secret and PINK labels. Bath & Body Works provides fragrances for the body and home, such as collections of hand soap, hand sanitizers and candles, among other items.

L Brands said in the announcement that it anticipates posting earnings per share of roughly 97 cents, including a 28 cent per share charge connected to the early extinguishment of debt.

“We anticipate L Brands will deliver a record first-quarter earnings result driven by continued strength and exceptional performance at Bath & Body Works and a significant improvement at Victoria’s Secret,” L Brands CEO Andrew Meslow said in the announcement.

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