Shoppers walk past a Victoria’s Secret store in a mall in San Diego, Calif., On April 22, 2021.

Bing Guan | Bloomberg | Getty Images

L Brands said Tuesday it would outsource its Victoria’s Secret brand instead of selling it.

The company said it has received interest and discussions with several potential buyers. However, the board decided that splitting Victoria’s Secret and Bath & Body Works into two separate public companies would be a better option. The spin-off is expected to be completed in August.

Andrew Meslow, Chief Executive of L Brands, will remain in his position and will also head Bath & Body Works after the spin-off, the company said. Martin Waters, CEO of Victoria’s Secret, will continue to run the independent business after the separation.

“We have made significant strides in running the Victoria’s Secret business over the past ten months,” said Sarah Nash, chairwoman of the L Brands board of directors, in a statement.

L Brands shares fell around 3% on the Tuesday leading up to trading.

L Brands resumed talks with potential buyers for Victoria’s Secret after a sale to private equity firm Sycamore Partners fell apart last year due to the Covid pandemic. That deal would have valued the lingerie label at $ 1.1 billion.

Sycamore sued L Brands last April for terminating a deal that would have given the private equity firm 55 percent control of Victoria’s Secret for around $ 525 million. It has been argued that L Brands violated the terms of the agreement by not paying rent and not taking workers off. L Brands prevented a lawsuit by agreeing to break off the deal.

Since that past holiday season, the L Brands management team at Victoria’s Secret has created a growing momentum. The company has already improved its earnings outlook for the first quarter twice, citing increased buyer demand for lingerie and loungewear.

Analysts from Citi and JPMorgan recently valued Victoria’s Secret as an independent company at around $ 5 billion.

The plans for the split were first published in the New York Times.

L Brands shares are up roughly 84% since the start of the year. It has a market cap of $ 19.2 billion.