The plan to sell Victoria’s Secret to a private equity firm was mutually terminated on Monday after the buyer, Sycamore Partners, tried to back out of the deal because it said it did not agree with steps the lingerie brand took in response to the coronavirus pandemic.

In a statement on Monday, Sarah Nash, a director at L Brands and the company’s incoming chairwoman, cited the “extremely challenging business environment” for retailers as part of its decision to put an end to the deal.

“Our board believes that it is in the best interests of the company, our stockholders and our associates to focus our efforts entirely on navigating this environment to address those challenges and positioning our brands for success rather than engaging in costly and distracting litigation to force a partnership with Sycamore,” Ms. Nash said.

After the sale closed, the plan was for L Brands to remain a public company consisting of Bath & Body Works while Sycamore worked to revive Victoria’s Secret as a private company.

On Monday, L Brands said that it planned to move forward with establishing Bath & Body Works as a “pure-play public company” and was taking “necessary steps” to prepare Victoria’s Secret to operate as a separate company. It also said that Mr. Wexner would step down as planned. Andrew Meslow, the current chief executive of Bath & Body Works, will become the C.E.O. of L Brands.

Stuart Burgdoerfer, who is currently the chief financial officer of L Brands, was appointed as interim chief executive of Victoria’s Secret, effective immediately. He will continue to be the C.F.O. of L Brands and report to Mr. Meslow and Ms. Nash.

The leadership changes will go into effect as of May 14, the day of the company’s annual shareholder meeting. The company said it would share additional details on its strategy during its next earnings call on May 21.

“The company will continue to take proactive measures to appropriately manage costs and expenditures to ensure liquidity in light of the ongoing Covid-19 pandemic, while also continuing to take steps to improve the brands’ performance,” L Brands said in the statement.

Source Article