L Brands (L BRANDS) has agreed to sell control of Victoria’s Secret to private-equity firm Sycamore Partners.
Sycamore Partners will buy 55% of Victoria’s Secret, while L Brands will keep a 45% stake in the private company.
Leslie Wexner will step down as CEO and chairman, but will remain on the L Brands board and retain stakes in both companies.
Last week L Brands stock jumped 2.1% on earlier media reports about the deal. MKM analyst Roxane Meyer initally wrote Victoria's Secret could fetch anywhere from $2 billion to $3.4 billion, and L Brands could use the cash to pay down its nearly $5.5 billion debt.
A sale of Victoria's Secret will leave L Brands with the much better-performing Bath & Body Works as its flagship brand. The retailer's sales have risen steadily so that it now accounts for half of L Brands' revenue.
Victoria's Secret has been criticized for sticking too long with its emphasis on lingerie, even as market and consumer trends shifted toward an emphasis on comfort.