Wall Street cheers plan to close 250 Victoria’s Secret stores

Victoria’s Secret is slimming down — and Wall Street likes the new look.

The lingerie giant’s corporate parent L Brands saw a 10-percent stock surge on Thursday after Victoria’s Secret said its shuttering more than 20 percent of its stores this year — or about 250 locations in the US and Canada — as its sales continue to plummet.

Shares of Columbus, Ohio-based L Brands recently changed hands at $13.61, up 11.4 percent.

Investors were heartened to hear that L Brands is doubling down on its plan to separate its healthy Bath & Body Works brand — which has continued to see sales growth — from its troubled Victoria’s Secret brand.

“As part of our strategy to increase shareholder value, we remain committed to establishing Bath & Body Works as a pure-play public company,” L Brands said in a statement, “and we are taking the necessary steps to prepare the Victoria’s Secret Lingerie, Victoria’s Secret Beauty and PINK businesses to operate as a separate, standalone company.”

Bath & Body Work’s direct sales grew by 85 percent in the first quarter compared with a 15 percent decline for Victoria’s Secret, the company said.

“We continue to believe Victoria’s Secret sits in the interesting position of being one of the largest brands in the history of time, and yet one that, for all intents and purposes, does not make money,” BMO analyst Simeon Siegel wrote in a research report. “We think a smaller VS, with fewer promotional sales, would be a healthier VS.”

L Brands, which also owns the Bath & Body Works chain, saw sales decline 37 percent in the quarter ended May 2. Some 50 Bath & Body Works stores are also on the chopping block this year.

Victoria’s Secret suffered a major loss this month when a deal to sell a 51-percent stake in the company was called off by the private equity firm Sycamore Partners.