Victoria's Secret owner L Brands has announced that the deal with Sycamore Partners, on the sale of a majority stake in the lingerie brand, has been called off. This avoids a bitter legal battle between the two parties.
For the time being, the search for a new owner for Victoria's Secret comes to an end: owner L Brands said it was preparing to operate Victoria's Secret and sister chain Bath & Body Works (a personal care brand) as separate, stand-alone units. This goal will now received its full focus, rather than a possibly expensive and distracting legal battle to enforce a partnership with Sycamore, The Business Times writes.
At the end of February, L Brands and Sycamore closed a deal worth 525?million dollars (480?million euros). For that amount, the investment company would acquire 55?% of the shares of Victoria's Secret. However, the coronavirus crisis turned the tables: Sycamore wanted to drop out of the deal, arguing that L Brands had breached the terms of the agreement by closing the stores and suspending rent payments.
However, abandoning the deal does not mean that the controversial CEO Leslie Wexner is now staying on. He will step down as CEO, but will remain honorary chairman. Andrew Meslow, currently CEO of Bath & Body Works, is likely to lead the parent company in the future.