LB - L Brands Launches a Joint Venture for Victoria's Secret U.K.
After COVID-19 derailed its attempt to sell the Victoria's Secret brand earlier this year, L Brands (NYSE: LB) announced today that Victoria's Secret U.K. will be acquired under a joint venture between Victoria's Secret and Next PLC, the U.K.'s biggest clothing retailer. Next PLC will have a 51% stake in the joint venture. Store operations in the U.K. and Ireland and the corresponding online businesses will come under the control of the joint venture by spring 2021, rather than being directly managed by L Brands.
L Brands made an impressive second-quarter comeback after sustaining heavy first-quarter sales losses and a $275 million net loss, but Victoria's Secret remained the weakest link in its lineup of brands. Bath & Body Works saw comparable store sales, or comps, rocket 123% during Q2, with an operating margin of approximately 23% that contrasted sharply with Victoria's Secret's sub-2% operating margin.
Image source: L Brands.