2 More Hurdles Standing in the Way of L Brands Shedding Victoria's Secret
Although parent company L Brands (NYSE: LB) has yet to confirm it, the working theory that it's considering a sale of its Victoria's Secret arm remains the market's assumption. A "person familiar with the matter" intimated the possibility to Bloomberg on Wednesday of last week.
The prospect is far from guaranteed, however. L Brands may be looking to sell Victoria's Secret, but that doesn't inherently mean a suitor is willing to buy it -- at least not at a palatable price. The lingerie brand's same-store sales have been shrinking for a long while now, and full-year operating profits are frequently flirting with nil. Any organization that acquires it will be taking on a sizable repair project.
The impasses to a sale go well beyond slumping sales, however. While news of the sale and the corresponding exit of CEO (and founder) Leslie Wexner have dominated the headlines since Bloomberg introduced the idea, a couple of other headaches are waiting in the wings. Both raise questions of how fiscal responsibility might be divvied up.
Source Fool.com
