"The numbers will look far better than what they did last spring, when L Brands was forced to drop a deal with the private-equity fund Sycamore Partners to sell 55-percent stake of the company for $525 million. Sycamore had sued to exit the deal after it found out Victoria’s Secret’s stores had been skipping rent after the onset of the pandemic.
This week, L Brands said Victoria’s Secret’s fourth-quarter earnings before interest and taxes more than doubled from a year earlier despite a 15-percent sales drop — a signal that shoppers are willing to pay full price for its frilly wares."
Doubled in a pandemic quarter versus non-pandemic (my add)
"Nine months after ditching its $1 billion Sycamore deal, Victoria’s Secret now “could be worth $4 to $5 billion,” said BMO Capital Markets analyst Simeon Siegel.
He reckons that prospective buyers will be willing to pay at least six times the company’s Ebitda, or earnings before interest, taxes, depreciation and amortization.
“The issue was never getting people to buy the product but to get them to pay full price,” Siegel added.
Berna Barshay, editor of Empire Financial Daily, a New York-based newsletter, confirms that “the more bullish buyside estimates at hedge funds are north of $4 billion” for a Victoria’s Secret sale, which the company is aiming to wrap up by August. The brand was valued at $15 billion just five years ago, she noted.
“Sycamore had a steal at $1 billion and will have regrets over busting out of the deal,” Barshay added. “I think Sycamore panicked and Victoria’s Secret weathered the storm better than people would have expected.”
Man that's gotta hurt the Sycko team!