American fashion and beauty owner L Brands has slapped Sycamore Partners with a lawsuit and described its actions as “gamesmanship” after attempting to back out of its Victoria’s Secret takeover.
The US$525m deal would have seen Sycamore take over 55% of Victoria’s Secret Lingerie, Victoria’s Secret Beauty and the Pink fashion brand, which was valued at US$1.1bn.
According to Delaware state court documents, Sycamore contacted L Brands appearing to terminate the agreement on the grounds that L Brands had “materially breached the agreement” due to the coronavirus pandemic.
The New York-based private equity firm argued L Brands had breached the terms of the deal by closing nearly all of Victoria’s Secret and Pink’s 1,600 outlets, without seeking its permission, and furloughing its staff, reported Reuters.
L Brands retaliated that these claims were “nonsense” and that as the current owner of Victoria’s Secret it has “every economic incentive to preserve the value of Victoria’s Secret”.
L Brands’ court documents added: “Sycamore and its representatives may wish that the world did not have to face the pandemic that now confronts us, and may regret that they did not negotiate the allocation of pandemic risk differently.
“But having made the commercial choice, Sycamore must now live by it.”
