L Brands, Sycamore agrees to drop Victoria’s Secret deal as lingerie retailer stock plunges
Victoria’s Secret owner, L Brands, has agreed to call off the sale of its lingerie brand unit to Sycamore Partners as stocks plunged due to coronavirus crisis.
L Brands said it will stay committed in operating Victoria’s Secret as well as its personal care brand Bath & Body Works separately despite falling stocks.
“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,” L Brands board member Sarah Nash said in a statement.
The Ohio-based L Brands fell more than 15% of its shares on Monday, while it recorded an 11% drop in the extended trading.
The deal was already at the brink of collapse after Sycamore decided to drop the $525 million deal for the 55% shares in Victoria’s Secret in late April.
Sycamore filed a complaint because of the lingerie brand’s alleged breach of contract after closing nearly all of its about 1,600 Victoria’s Secret and PINK stores globally without Sycamore’s petition.
L Brands then said it plans to challenge the decision, but recently dropped the case.