The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — Victoria's Secret owner L Brands Inc. said it reached an agreement with Sycamore Partners to cancel their previous pact for the private equity firm to buy a majority stake in the lingerie chain.
Sycamore Partners and L Brands also agreed to settle all pending litigation, the company said in a statement. Bath & Body Works, also owned by L Brands, will be operated as a public company, while Victoria’s Secret will be run separately. Shares of L Brands fell as much as 18 percent to $9.82 in late trading on Monday.
The February deal was thrown into jeopardy in late April when Sycamore sued to terminate the transaction, arguing that Columbus, Ohio-based L Brands violated the terms of the agreement by failing to pay rent and furloughing thousands of workers amid the coronavirus pandemic. L Brands counter-sued to enforce the terms of the agreement.
The agreement brings an abrupt end to one of the highest-profile deals this year in the retail world and charts an uncertain path for a storied American brand. Victoria's Secret had been a pioneer in mass-market lingerie, but the business has declined in recent years amid controversy and changing consumer tastes.
ADVERTISEMENT
Now L Brands, which has struggled to turn around the struggling lingerie brand, will be going at it alone again.
“As part of L Brands’ strategy, the company remains committed to establishing Bath & Body Works as a pure-play public company and is taking the necessary steps to prepare the Victoria’s Secret Lingerie, Victoria’s Secret Beauty and PINK businesses to operate as a separate, standalone company,” the retailer said.
The lingerie company said it would provide further details on its plans for Victoria’s Secret during an earnings call on May 21.
L Brands said longtime leader Leslie Wexner will step down as chief executive officer and chairman. Andrew Meslow, who runs L Brands’ Bath & Body Works, will become CEO of the parent company and join the board, while Sarah Nash will become chair.
Neither party will be required to pay the other a termination fee over the cancelled deal, according to a separate statement from Sycamore.
By Jordyn Holman.
Related Articles:
[ What the Potential End of the Victoria’s Secret Deal Means for Retail MAOpens in new window ]
[ Sycamore Partners Seeks to End Victoria's Secret Acquisition DealOpens in new window ]
[ Victoria's Secret's New Owner Has a History With Troubled BrandsOpens in new window ]
Fast-growing start-ups like Hettas, Saysh and Moolah Kicks created sneakers designed specifically for active women. The sportswear giants are watching closely.
The companies agreed to cap credit-card swipe fees in one of the most significant antitrust settlements ever, following a legal fight that spanned almost two decades.
In an era of austerity on Wall Street, apparel businesses are more likely to be valued on their profits rather than sales, which usually means lower payouts for founders and investors. That is, if they can find a buyer in the first place.
The fast fashion giant occupies a shrinking middle ground between Shein and Zara. New CEO Daniel Ervér can lay out the path forward when the company reports quarterly results this week.