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United States securities and exchange commission logo
May 14, 2021
Martin Waters
Chief Executive Officer
Victoria's Secret & Co.
4 Limited Parkway East
Reynoldsburg, Ohio 43068
Re: Victoria's Secret &
Co.
Draft Registration
Statement on Form 10-12B
Submitted April 16,
2021
CIK No. 0001856437
Dear Mr. Waters:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form 10-12B submitted April 16, 2021
Exhibit 99.1 Information Statement
Note Regarding the Use of Certain Terms, page ii
1. Your statements that
the industry and market data included in your information statement
"could prove to be
inaccurate," "could be wrong . . . because information cannot always be
verified," and you "do
not know all of the assumptions . . . that were used in preparing the
forecasts from the
sources relied upon or cited herein" may imply an inappropriate
disclaimer of
responsibility with respect to third-party information included in your
information statement.
Please either delete these statements or specifically state that you
are liable for such
information. As a related matter, your disclosure here provides that
some of the third-party
publications, studies and reports contained in this information
Martin Waters
FirstName LastNameMartin Waters
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statement "were published before the COVID-19 pandemic and therefore
do not reflect
any impact of COVID-19 on any specific market or globally." Given VS's
business
operations and financial performance for 2020 have been materially
impacted by the
COVID-19 pandemic, please indicate what third-party estimates provided
do not include
the impact of the COVID-19 pandemic, and tell us why you believe such
estimates would
be useful to investors in making an investment decision about your
business.
Overview, page 1
2. We note references in this section as well as in your Business section
that allude to VS
being profitable or improving its profitability. We also note that for
fiscal years 2019
and 2020 VS reported net losses. Further, we note that the company's
net sales decreased
substantially in fiscal year 2020 and that the company's gross profit
has decreased
substantially in fiscal years 2020 and 2019. Please revise this
section to balance your
discussion with the company's recent net losses in fiscal years 2019
and 2020, the
company's decreased net sales in fiscal year 2020, and the company's
decreased gross
profit in fiscal years 2019 and 2020. Please also discuss the debt
that you intend to incur
in connection with the separation in this section.
Summary
Our Competitive Strengths
Global Scale at Retail, page 2
3. We note you disclose that VS's "recent and decisive actions to evolve
[y]our positioning
and promote inclusivity and diversity have allowed [you] to attract
new customers while
also deepening [y]our connection with existing ones" and that VS had
25 million active
customers as of January 2021. Please define the term active customers,
and provide
information on how many active customers you had in previous years for
comparison.
Risk Factors, page 17
4. We note that VS has experienced net losses. Please add risk factor
disclosure to address
this, if true, for the most recent two fiscal years.
Risks Relating to Our Common Stock
Our amended and restated bylaws will designate Delaware..., page 37
5. We note that the exclusive forum provision in your amended and
restated bylaws will
designate the state courts of the State of Delaware (or, if no state
court located within the
State of Delaware has jurisdiction, the federal court for the District
of Delaware) as the
exclusive forum for certain litigation, including "any derivative
action or proceeding."
Please disclose whether the provision will apply to actions arising
under the Securities Act
or Exchange Act. If it does, state that there is uncertainty as to
whether a court would
enforce such provision. If the provision will apply to actions arising
under the Securities
Act, please also state that investors cannot waive compliance with the
federal securities
Martin Waters
FirstName LastNameMartin Waters
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laws and the rules and regulations thereunder. In that regard, we note
that Section 22 of
the Securities Act creates concurrent jurisdiction for federal and
state courts over all suits
brought to enforce any duty or liability created by the Securities Act
or the rules and
regulations thereunder. If the provision will not apply to actions
arising under the
Securities Act or Exchange Act, please also ensure that the exclusive
forum provision in
your amended and restated bylaws states this clearly, or tell us how
you will inform
investors in future filings that the provision does not apply to any
actions arising under the
Securities Act or Exchange Act.
Conditions to the Distribution, page 45
6. We note that L Brands, Inc., in its sole discretion, can waive certain
conditions to the spin-
off, including that (i) all actions and filings necessary under
federal or state securities laws
related to the transaction shall have been taken; (ii) the acceptance
of VS's common stock
for listing on the NYSE; (iii) a legal opinion has been received
providing that, for U.S.
federal income tax purposes, the distribution and restructuring will
qualify as a generally
tax free distribution and reorganization for U.S. federal income tax
purposes or non-U.S.
tax purposes; and (iv) any necessary government approvals have been
obtained. Please
update your disclosure to discuss the potential consequences to
stockholders if L Brands,
Inc. waives such conditions and proceeds with the spin-off.
Management s Discussion and Analysis of Financial Condition and Results of
Operations
Impacts of COVID-19, page 61
7. Please include a specific discussion of the costs VS incurred and any
other negative
impacts on the company as a result of the COVID-19 pandemic. In
addition, please
quantify the reduced capital expenditures, suspended store and office
rent payments and
other factors you implemented in 2020 as a result of COVID-19, and
clarify to what
extent the measures are ongoing. Further, we note your disclosure
elsewhere in your
filing that VS's direct/digital channel sales increased by 31% in
fiscal 2020. Please revise
your disclosure to indicate the extent to which you believe the
pandemic was responsible
for the increase in your direct/digital channel sales, and include a
discussion of whether
you expect the growth in your direct/digital channel sales to continue
after the pandemic
subsides. Refer to CF Disclosure Guidance Topics No. 9 and 9A.
Key Factors Affecting Our Business, page 62
8. Please provide context for the profit improvement plan by discussing
and quantifying, to
the extent you are able, the costs associated with the separation.
Results of Operations
Results of Operations-2020 Compared to 2019, page 68
9. We note that you use the change in VS's comparable sales to provide an
indication of
period over period growth. We also note your disclosure on pages 58
and 68
Martin Waters
Victoria's Secret & Co.
May 14, 2021
Page 4
that, "Stores are excluded from the comparable sales calculation if
they have been closed
for four consecutive days or more," and thus, "comparable sales
results for 2020 exclude
stores that were closed for four consecutive days or more as a result
of the COVID-19
pandemic." Given your disclosure elsewhere provides that all your
stores in the U.S. were
closed on March 17, 2020 and most remained closed until the beginning
of your third
quarter, it appears that at least all of your U.S. stores would be
excluded from this
calculation as they appear to have been closed for greater than four
consecutive days in
2020. Please revise your disclosure to clarify as much. To the extent
that all of your U.S.
stores are excluded from this calculation, please explain the
significance of this metric for
the periods presented.
10. Reference is made to your discussion of changes in net sales for
fiscal 2020 as compared
to fiscal 2019. Where you describe two or more factors that
contributed to a material
change in a financial statement line item between periods, please
quantify, to the extent
practicable, the incremental impact of each factor identified. Please
also revise to define
the terms conversion and average unit retail, as we note that they are
both used in several
places in your prospectus.
Business, page 79
11. In an appropriate place in your Business section, please discuss the
material effects that
compliance with government regulations may have on your business, as
required by Item
101(c)(2)(i) of Regulation S-K.
Our Brands
PINK, page 82
12. Your disclosure here indicates that you offer swimwear products under
your PINK brand.
Yet, your disclosure on page 70 indicates that you exited the swim
business under
the PINK brand. Please revise for consistency or advise.
Franchise, License and Wholesale Arrangements, page 85
13. Please discuss the material terms of your franchise, license,
wholesale and joint venture
arrangements. Describe what obligations you have to your partners
under these
arrangements, the amount of control you have over day-to-day
operations of the
franchisees, the duration of the arrangements, and any other material
terms including how
royalties and franchise fees are assessed.
Exhibits
FirstName LastNameMartin Waters
14. To the extent material, please file any agreements related to your joint
venture partnership
Comapany
withNameVictoria's
Next PLC, ABLSecret & Co.
Facility, and Secured Foreign Facilities as
exhibits to the
May 14,registration
2021 Pagestatement.
4 Refer to Item 601(b)(10) of Regulation S-K.
FirstName LastName
Martin Waters
FirstName LastNameMartin Waters
Victoria's Secret & Co.
Comapany
May NameVictoria's Secret & Co.
14, 2021
May 14,
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FirstName LastName
Please contact Nicholas Lamparski at 202-551-4695 or Jacqueline Kaufman
at 202-551-
3797 with any other questions.
Sincerely,
Division of Corporation
Finance
Office of Trade &
Services
cc: Deanna L. Kirkpatrick