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L Brands, Sycamore Partners Call Off Deal To Take Victoria’s Secret Private

Plans to take the struggling Victoria’s Secret chain off the balance sheet of parent company L Brands have been terminated. The retail company and private equity firm Sycamore Partners had announced plans to take Victoria’s Secret private in February, with Sycamore purchasing a 55% stake in Victoria’s Secret for $525 million. However, the deal was cancelled on May 4 with a mutual agreement to not pursue litigation or charge each other any termination fees.

L Brands is still seeking ways for the Victoria’s Secret brand to be spun off and operate as a standalone company. The company closed both brick-and-mortar and online Victoria’s Secret and PINK stores in mid-March in response to the COVID-19 pandemic.

Bath & Body Works, which has been one of the bright spots in the L Brands portfolio, could also be spun off, but as a pure-play public company. “Bath & Body Works has a consistent track record of delivering strong results, including another record year in 2019,” said Sarah Nash, current director and future Chair of the L Brands Board in a statement. “Despite the fact that nearly all Bath & Body Works are temporarily closed due to COVID-19, it is continuing to serve customers through its direct channel, www.BathandBodyworks.com.”

The company also announced several high-level personnel changes. Leslie Wexner had reportedly been planning to step down as early as January 2020, and now those plans are a reality. Wexner, the longest-serving head of an S&P 500 company — he founded what would eventually become L Brands in 1963 — will relinquish his CEO and Chairman of the Board titles, but will remain a board member as Chairman Emeritus. Bath & Body Works CEO Andrew Meslow will become CEO of L Brands and join its board, and Stuart Burgdoerfer, L Brands’ current CFO, has been named interim CEO of Victoria’s Secret.

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