Victoria's Secret Calls Off Deal With Sycamore Partners

L Brands, Victoria's Secret's parent company, announced that it has called off its deal with private equity firm Sycamore Partners, CNN reported. L Brands was planning to take the lingerie retailer private, and had reached a $525 million deal with Sycamore Partners three months ago. The deal would have split control of Victoria's Secret, with Sycamore Partners buying a 55 percent stake and L Brands remaining control of 45 percent.

To prevent the spread of coronavirus, L Brands temporarily closed its retail stores, including Victoria's Secret locations, in mid-march. Sycamore Partners argued those changes were in violation of its agreement, CNN reported.

When this deal was announced in February, L Brands also announced that the company's CEO, Leslie Wexner, would be stepping down from that position, but would remain on the board as chairman emeritus. Wexner is still stepping down as previously planned.

Total Retail's Take: This is a difficult time for retailers as they try to chart a path forward in both a challenging economic environment as well as one where consumers are reluctant to venture into physical stores. This current situation is only compounding the problems facing Victoria's Secret, and by extension its parent company, L Brands. In a matter of days, Victoria's Secret, along with most retailers, had to shut their brick-and-mortar stores and furlough employees. Therefore, it's not surprising that Sycamore Partners would re-evaluate its deal with L Brands, as it couldn't have been eager to take control of the retailer in the current climate. Without a buyer, Victoria's Secret's future is uncertain. It will be interesting to see if any other potential buyers come forward at this time. One has to be suspect of that at this point.