// Victoria’s Secret owner L Brands scraps £407m deal with Sycamore Partners
// The company aims to take the lingerie retailer private
Victoria’s Secret owner L Brands has called off a deal with private equity firm Sycamore Partners to take the retailer private, just three months after it had reached a $525 million (£407 million) agreement.
L Brands said it is preparing for the lingerie retailer to operate as a separate company.
The deal was already uncertain after Sycamore Partners told L Brands of its decision to pull out of the agreement last week.
- L Brands sells majority ownership of Victoria’s Secret for £407m
- Victoria’s Secret faces backlash for discarding hundreds of bras
L Brands temporarily closed its retail stores in mid-March due to the coronavirus pandemic.
The parties came to an agreement to split control of Victoria’s Secret back in February.
Sycamore was due to buy a 55 per cent stake, while L Brands would retain control of the remaining 45 per cent.
However, Sycamore filed a suit last month, requesting that a judge terminates the contract after L Brands allegedly violated the terms of the agreement by closing its US stores and temporarily shutting down the ecommerce side of the business, resulting in the company furloughing staff.
“Like all retailers, the company faces an extremely challenging business environment,” L Brands director, and incoming chair, Sarah Nash said.
“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.
“We are implementing significant cost reduction actions and performance improvements at Victoria’s Secret while continuing to drive strong growth at Bath & Body Works.
“We will continue to make decisions and take actions with the best interests of all our stakeholders and the future of our company in mind.”