L Brands on Thursday said it would to sell its luxury lingerie brand La Senza to an affiliate of private equity firm Regent LP, capping a month’s long effort to sell the loss-making business.
The company has been facing stiff competition from American Eagle Outfitter’s Aerie and upstarts such as Adore Me and Third Love, forcing it to sell its non-core assets and focus on brands such as Victoria’s Secret and Bath & Body Works.
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As part of the deal, Regent would assume La Senza’s liabilities and would have to pay L Brands if it sells or monetizes any part of the lingerie brand.
L Brands bought Canadian chain La Senza for about $700 million in early 2007 and expects it to incur an operating loss of $40 million in the year.
The company, which had said it was exploring options for La Senza business in October, expects to complete the transaction in January.
Shares of the company, which had fallen 48 percent this year, were rose 1 percent to $31.8 in early trading.
In September, L Brands announced that it would be closing iconic luxury brand Henri Bendel, which it acquired in 1985 but has been in business for 123 years.
The company said at the time that it wanted to focus on more profitable brands.
“We are committed to improving performance in the business and increasing shareholder value. As part of that effort, we have decided to stop operating Bendel to improve company profitability and focus on our larger brands that have greater growth potential,” L Brands chairman and CEO Leslie Wexner said in a statement to the press at the time.