The agreement to sell a majority of the lingerie brand to Sycamore Partners was terminated after the firms sparred in court.
The plan to sell Victoria’s Secret to a private equity firm was mutually terminated on Monday after the buyer, Sycamore Partners, tried to back out of the deal because it said it did not agree with steps the lingerie brand took in response to the coronavirus pandemic.
L Brands, which also owns Bath & Body Works, had agreed in February to sell a majority of Victoria’s Secret to Sycamore Partners for about $525 million. The transaction was expected to close in the second quarter. But as the pandemic forced Victoria’s Secret and many other retailers to temporarily close stores and furlough employees, Sycamore had second thoughts. The firm first tried to renegotiate the purchase, and then filed suit in Delaware to terminate the agreement, claiming L Brands had breached the terms of the deal. L Brands countersued, calling the attempt “invalid.”
In a statement on Monday, Sarah Nash, a director at L Brands and the company’s incoming chairwoman, cited the “extremely challenging business environment” for retailers as part of its decision to put an end to the deal.
“Our board believes that it is in the best interests of the company, our stockholders and our associates to focus our efforts entirely on navigating this environment to address those challenges and positioning our brands for success rather than engaging in costly and distracting litigation to force a partnership with Sycamore,” Ms.
