Victoria’s Secret going private with $1bn valuation
Deal will see a private equity firm taking a controlling stake in the troubled lingerie business
A controlling stake in high-street lingerie brand Victoria’s Secret is being bought by a private equity firm in a deal that values the retailer at $1.1bn (£85m, €1bn).
That valuation is seen as low for a business that generated about $7bn in annual sales in its last fiscal year.
Sycamore Partners is expected to buy 55 per cent of the troubled firm from L Brands Inc, which will retain the remainder, reports the Wall Street Journal.
Leslie Wexner, the 82-year-old billionaire who has run the retail company for more than 50 years, is expected to step down from his role as CEO and chairman, remaining on the board and keeping his 17 per cent share of L Brands.
The move is being seen as a new start for the Ohio-based firm which last year had announced a turnaround plan that involved changing its marketing messages and image.
Victoria’s Secrets’ failure to move with the times lay behind its gradual demise. While rivals sold lingerie for comfort, Victoria’s Secret remained focused on image. A broader retail shift to e-commerce and away from shopping malls has also dealt a blow.
Even so, L Brands, which is due to report quarterly results next Wednesday, has seen its shares rise some 35 per cent this year after four years of falls. The shares rose a further 2 per cent on the news.
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