A customer carries a shopping bag while exiting a Victoria’s Secret Stores LLC store, a subsidiary of L Brands Inc., in New York, U.S., on Wednesday, Nov. 14, 2018.

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L Brands shares tumbled 15% in extended trading Monday after announcing it struck an agreement with Sycamore Partners to terminate its Victoria’s Secret deal. 

The company said it is “implementing significant cost reduction actions and performance improvements at Victoria’s Secret,” which will include “proactive measures” to ensure liquidity “in light of the ongoing Covid-19 pandemic.” Like many other retailers, L Brands has been forced to shutter its stores as restrictions are implemented to halt the spread of the coronavirus. 

In February, Sycamore had agreed to acquire a 55% share in Victoria’s Secret for $525 million, allowing the brand to go private. L Brands was hoping to focus on running its better-performing store, Bath & Body Works.

Private equity firm Sycamore Partners tried to end the deal with L Brands in April, citing store closures and missed rent payments in April, according to a lawsuit filed in a Delaware court.

L Brands said, as part of the mutual agreement, neither party in the deal is required to pay the other a termination fee. The retailer said it made the decision to end the deal to avoid “costly and distracting litigation to force a partnership with Sycamore.”

L Brands announced that it is still interested in “establishing Bath & Body Works as a pure-play public company” and it hopes to prepare its Victoria’s Secret lingerie, beauty and Pink businesses to operate as a standalone company as well.

In addition, the company announced several leadership changes that will be effective on May 14. 

Leslie Wexner will step down as CEO and chairman, but will remain on the board as chairman emeritus.

Andrew Meslow, the CEO of Bath & Body Works, will become CEO of L Brands and join the board.

The board also tapped Stuart Burgdoerfer, currently L Brands’ chief financial officer, as interim CEO of Victoria’s Secret, effective immediately.

L Brands, which has a market value of $3.3 billion, has seen its stock fall nearly 34% since the start of the year, and nearly 54% over the past year. 

This is a breaking news story please check back for updates.

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