Victoria’s Secret is becoming a publicly traded company

L Brands has officially given up on seeking a buyer for Victoria’s Secret and is spinning off the struggling underwear brand to become its own publicly traded company instead.

As a result, L Brands will now consist of two publicly traded companies — Bath & Body Works and Victoria’s Secret — with the transaction expected to be completed in August. The company said Tuesday that doing this will “enable each company to maximize management focus and financial flexibility to thrive in an evolving retail environment and deliver profitable growth.”

L Brands almost sold Victoria’s Secret last year to private equity firm Sycamore Partners. However, the $525 million deal went bust partly because of the pandemic that forced temporary store closures. Sycamore argued those changes were in violation of the deal, so it nixed the transaction.

A search for a Victoria’s Secret buyer continued this year, however the New York Times reports that offers for it weren’t high enough. L Brands said that it “held discussions with multiple potential buyers” and said that spinning it off into a “separate, public company would provide shareholders with more value than a sale.”

Sarah Nash, the chair of L Brands’ board, said that Victoria’s Secret has made “significant progress” in its turnaround process, which includes store closures and refreshed merchandise.

“The board believes that this path forward will return the highest value to shareholders and that the separation will allow each business to achieve its best opportunities for growth,” she said.

L Brands gave investors a glimpse of their first quarter earnings ahead of the official release later this month. The company said Bath & Body Works and Victoria’s Secret both “benefited from stimulus payments and the relaxation of Covid-19 restrictions.”

Shares of L Brands fell nearly 2% in early trading.