After announcing a plan in February to purchase a 55% stake in L Brand’s Victoria’s Secret, private equity firm Sycamore Partners is looking to terminate the deal.
The firm filed a lawsuit in the Court of Chancery of the State of Delaware today, Wednesday, April 22. According to Reuters, the investment firm wants to pull out of the deal due in part to the brand’s response to the coronavirus pandemic.
“L Brands believes that Sycamore Partners’ purported termination of the Transaction Agreement is invalid,” a press release from L Brands read. “L Brands will vigorously defend the lawsuit and pursue all legal remedies to enforce its contractual rights, including the right of specific performance. L Brands intends to continue working towards closing the transactions contemplated by the Transaction Agreement.”
The filing cites actions like closing nearly all of it stores, furloughing employees and reducing compensation for senior staff, among other actions that hurt the brand.
On March 17, L Brands announced it would temporary close of all Bath & Body Works, Victoria’s Secret and PINK stores across the U.S. through March 29. On March 25, the parent company announced it would re-open VictoriasSecret.com and resume taking customer orders. Two days later, on March 27, L Brands announced the extension of its store closures, giving no firm date on store re-openings.
The March 27 announcement also stated that cash compensation of Chairman and CEO Leslie H. Wexner and other members of the Board of Directors had been suspended. When the sale closed, Wexner was supposed to be stepping down as CEO and Chairman of L Brands and remain a member of the Board as Chairman Emeritus.
For more information, visit lb.com.
