The lingerie giant has struggled with slumping sales and profits as it lost some customers to online upstarts and brands with more inclusive marketing.
Photo: Scott Olson/Getty ImagesL Brands Inc. and Sycamore Partners have agreed to scrap their plans to take Victoria’s Secret private, dropping a pact that was reached just weeks before coronavirus forced the lingerie retailer to shut its stores.
Last month, L Brands and Sycamore traded lawsuits after the private-equity firm sought to break the deal. On Monday, the two agreed to walk away and end the litigation. L Brands said it still plans to split itself in two and for its longtime leader Les Wexner to step down as chief executive.
L Brands said it wanted to focus on navigating the crisis rather than litigation to force Sycamore into their partnership. Sycamore said the decision was mutual and neither party will pay a termination fee.
Under the February deal, Sycamore would have paid $525 million for a 55% stake in Victoria’s Secret and Pink chains. The lingerie giant has struggled with slumping sales and profits as it lost some customers to online upstarts and brands with more inclusive marketing.
Shares of L Brands, which closed at $12.04, tumbled 15% on Monday to $10.35. The stock has fallen 54% in the past 12 months.
The decision means L Brands will have to weather the damage from the coronavirus without the cash injection it would have received from Sycamore. L Brands will also have to keep billions of dollars in lease payments that it would have shed in the buyout.
L Brands said Monday it plans significant cost reductions at Victoria’s Secret. L Brands said it plans to spin off its fast growing Bath & Body Works division into a separate publicly traded company.
The Columbus, Ohio, company closed its U.S. stores in March and said it would furlough most of its U.S. store workers. It employed about 94,000 people world-wide, including part-time staff, as of Feb. 1.
Mr. Wexner, who has been CEO for more than 50 years, will step aside as CEO on May 14, the day of the annual shareholder meeting. He will stay as chairman emeritus. Bath & Body Works CEO Andrew Meslow will assume the role of L Brands CEO and Sarah Nash will become the board chair.
Write to Kimberly Chin at kimberly.chin@wsj.com
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Business - Latest - Google News
May 05, 2020 at 06:20AM
https://ift.tt/2L4eVac
L Brands, Sycamore Agree to Scrap Victoria’s Secret Deal - The Wall Street Journal
Business - Latest - Google News
https://ift.tt/2Rx7A4Y
Bagikan Berita Ini
0 Response to "L Brands, Sycamore Agree to Scrap Victoria’s Secret Deal - The Wall Street Journal"
Post a Comment