Victoria’s Secret owner L Brands calls off £422m sale to private equity firm Sycamore
Victoria’s Secret owner L Brands has called off a £422m sale of a majority stake in the lingerie business to private equity firm Sycamore, after the coronavirus crisis sparked a legal battle between the two firms.
L Brands said it would focus on navigating the “extremely challenging business environment” rather than “engaging in costly and distracting litigation”. The company will operate Victoria’s Secret and Bath & Body Works at two separate units.
Sycamore last week said it planned to pull out of the deal to take Victoria’s Secret private. The buyout firm said L Brands decision to close all of the retailer’s stores during the coronavirus pandemic was in breach of the deal.
At the time L Brands signalled that it would oppose Sycamore’s decision.
L Brands director, and incoming chair, Sarah Nash said: “Like all retailers, the company faces an extremely challenging business environment.
“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.”
Nash will become chair of the board on 14 May when current chairman and chief executive Leslie Wexner steps down. Bath & Body Works boss Andrew Meslow has been promoted to chief executive of L Brands.