Lingerie company Victoria's Secret is being sold by owner and fashion retailer L Brands to a private equity firm in a deal worth $525 million.
Under the deal, private equity firm Sycamore Partners will acquire a 55% stake in Victoria's Secret for $525 million while the remaining 45% will be spun off by L Brands into a fully private company.
As part of the transaction, 82-year-old billionaire Leslie Wexner will step down as chief executive officer (CEO) and chairman of L Brands but will remain on its board as chairman emeritus.
In a press release, Wexner explained that separating Victoria's Secret into a privately held company "provides the best path to restoring these businesses to their historic levels of profitability and growth."
He commended Sycamore for its "deep experience" in the retail industry and said that it 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," Wexner added.
Upon completion of Victoria's Secret's spin off, L Brands will have Bath and Body Works as its main business, a reversal in strategy by the company which used to own several well-known mall brands including Abercrombie & Fitch, Lane Bryant and The Limited.
Barington Capital, a hedge fund that owns a small stake in the company, proposed the spinoff of Victoria's Secret to L Brands in March 2019.
Recently, Wexner has been the target of criticism due to his close ties to Jeffrey Epstein, the disgraced financier, whose death in jail last August has been ruled a suicide. Epstein was Wexner's former personal money manager and a trustee of the Wexner Foundation.
