Shares of beleaguered retailer L Brands (LB) - Get Report plunged Wednesday after the owner of Victoria’s Secret announced that private-equity firm Sycamore Partners gave legal notice to terminate the agreement for it to buy 55% of the women’s fashion brand.
The deal was signed Feb. 20. It came against a myriad of struggles for L Brands. The retailer has suffered from changing consumer tastes, away from brands like Victoria’s Secret; from company founder Leslie Wexner’s close relationship with deceased sex offender Jeffrey Epstein; and from accusations of sexism at the company.
“Sycamore Partners delivered a notice April 22 purporting to terminate the transaction agreement relating to the sale of a 55% interest in … Victoria’s Secret,” L Brands said in a statement. “Sycamore Partners also filed a lawsuit … seeking a declaratory judgment that its termination of the transaction agreement is valid.”
L Brands isn’t giving up on the deal. It “believes that Sycamore Partners’ purported termination of the transaction agreement is invalid,” the statement said.
“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.”
Sycamore Partners officials weren't immediately available for comment.
Wexner was set to step down as CEO of L Brands upon completion of the transaction. L Brands also owns Bath & Body Works.
L Brands shares recently traded at $9.82, down 18.57%. The stock has plunged 51% over the past three months.