Author：Xia Xiaodou
Compile：Azure
Source：GPLP
L Brands, the parent company of Victoria’s Secret, said in a statement that it had reached an agreement with private equity firm Sycamore Capital to terminate its bid for Victoria’s Secret.
In fact, as early as April 22, Sycamore Capital announced that it would terminate the acquisition transaction, saying that due to the public health event, Victoria’s Secret had damaged the brand value with the closure of the store and the employee’s vacation. As soon as the news came out, L Brands’ stock was also suspended, and the stock price fell 20.65% before the suspension. But it was only a unilateral announcement by Sycamore Capital, and Victoria Secret disagreed.
The company’s acquisition plans date back to February, when Sycamore Partners agreed with L Brands to buy 55 percent of Victoria’s Secret at a price of $525 million. The move brings the previously troubled company back from the dead at a valuation of $1.1 billion. And under L Brands’ plans, the money would be used to ease L Brands’ debt crisis.
However, many analysts said that the price is actually very low, Victoria’s Secret can be sold for a better price. But faced with declining sales market, Victoria’s Secret was forced to sell itself, which is also the recognition of L Brands founder Wexner’s “unrecoverable fate”.
Wexner bought Victoria’s Secret at a low price in 1982, Victoria’s Secret grew from a few stores to a company that dominates the underwear market, and its annual sales have reached $ 7 billion. At the beginning, Victoria’s Secret was all about “sexiness,” using underwear to get women to please men.
However, famous for its sexiness, Victoria’s Secret did not see the changes of the times after its sales reached the peak in 2016. It is still blindly pursuing sexiness, but it ignore the growing demand of comfort when women pay for underwear.
In 2019, L Brands announced that it would stop hosting the Victoria’s Secret Show for sales declining and traditional TV broadcasting is becoming outdated.
After “abandoned” by the investors, Victoria’s Secret could become a hot potato, making it harder to find people to “take the plate.”
Without the support of capital, where can Victoria’s Secret go with internal and external trouble?
