No Deal For Victoria’s Secret: Why The Lingerie Retailer Won’t Find A New Owner

L Brands (LB) has come to an agreement with Sycamore Partners to halt the sale of its Victoria’s Secret brand. The company had previously sued Sycamore to prevent termination of the deal.

The agreement will allow Sycamore to walk away from the deal, which was previously going to acquire a 55% share of Victoria’s Secret for $525 million. Sycamore did release a statement that said the termination of the deal was mutual, and neither party was required to pay a termination fee.

L Brands has struggled to keep Victoria’s Secret relevant as consumers shift toward more women inclusive brands. The company said it will implement “significant cost reduction actions and performance improvements at Victoria’s Secret” in light of keeping the brand.

The new measures will come as L Brands was forced to shut all Victoria’s Secret and Bath & Body Works stores because of the coronavirus pandemic. The company also furloughed the majority of its workforce.

L Brands had hoped the deal with Sycamore would allow it to focus on its successful Bath & Body Works brand, which it has considered spinning off. The company said it will continue to pursue Bath & Body Works as its own IPO.

Sycamore wanted out of its purchase of Victoria’s Secret after stores closed because of the COVID-19 pandemic, and the company missed rent payments in April. L Brands made the decision to halt its lawsuit against Sycamore after saying it was “costly and distracting.”

At the same time, L Brands also announced a change in leadership that takes effect on May 14. Leslie Wexner will step down from his position as CEO and chairman but will remain on the board as chairman emeritus.

Andrew Meslow will become CEO of L Brands, and join the company’s board. Sarah Nash will become chair of the board, and Allan Tessler, Gorden Gee, and Raymond Zimmerman will retire from the board.

Effective immediately, Stuart Burgdoefer will become CEO of Victoria’s Secret.

Shares of L Brands stock were down 1.41% as of 2:38 p.m. EDT on Tuesday.