L Brands has officially reached a deal with private equity firm Sycamore Partners to terminate the sale of Victoria’s Secret.
The transaction was initially announced in late February and would have given Sycamore Parters 55% interest in Victoria’s Secret and turned L Brands’ remaining hold Bath & Body Works into a standalone public company.
On April 22, Sycamore Partners filed a lawsuit in the Court of Chancery of the State of Delaware to terminate the deal, partly due to the brand’s response to the coronavirus pandemic.
“Like all retailers, the company faces an extremely challenging business environment,” said Sarah Nash, current director and future chair of L Brands’ Board in a press release. “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.”
Sycamore Partners and L Brands agreed to settle all pending litigation and mutually release all claims.
L Brands also shared more details on its plans for the two retailers moving forward while confirming already-slated changes in leadership.
The company still plans to turn Bath & Body Works into a pure-play public company. Steps will taken to operate Victoria’s Secret (collectively consisting of Victoria’s Secret Lingerie, Victoria’s Secret Beauty and PINK) as a separate, standalone company.
“We are implementing significant cost reduction actions and performance improvements at Victoria’s Secret while continuing to drive strong growth at Bath & Body Works,” Nash said. “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.”
Instead of instituting leadership changes when the transaction closed, personnel changes will go into affect on May 14 during the 2020 Annual Meeting of Stockholders. Leslie Wexner will still step down as CEO and Chairman of the Board of L Brands, but remain a member of the Board as Chairman Emeritus. Andrew Meslow, current CEO of Bath & Body Works, will become CEO of L Brands and join the Board, while Nash will become chair of the Board.
Current L Brands CFO Stuart Burgdoerfer will become interim CEO of Victoria’s Secret.
More details of L Brands’ plan moving forward will be shared during an earnings call on May 21.
During the coronavirus pandemic, L Brands announced it would temporary close all Bath & Body Works, Victoria’s Secret and PINK stores across the U.S. In Ohio, retail establishments are permitted to re-open under certain guidelines on Tuesday, May 12.
For more information, visit lb.com.