I’m thinking about Victoria’s Secret….

L Brands (LB:NYSE) is the parent company that owns Victoria’s Secret, Bath and Body Works and the PINK line of clothing. The company currently sports a dividend yield north of 6% but that is in part because the price of the stock is off nearly forty percent this year. The company made a decision to exit the swimwear market, which affected last quarters earnings quite a bit. Hopefully, the fallout from that is over.

A premium brand with a physical store presence and a beaten down stock price. Hmmm….Whiff, whiff, whiff…. Sniff, sniff, sniff. Smells like a company that could benefit from a take over. Any takeover story in retail lately has had Amazon (AMZN:NASDAQ) mentioned as the suitor, it seems. The purchase of Whole Foods gave Amazon close to 480 retail locations nationwide. Whole Foods is considered a premium, upscale brand, at least in price. Victoria’s Secret has 1600 locations worldwide. Amazon has been very candid about their desire to dominate the apparel market and they need locations to do that.

I’m not saying it will happen or should happen but it does make some sense.

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