Pedestrians walk past a Victoria’s Secret store, a subsidiary of L Brands, in New York.
Craig Warga | Bloomberg | Getty Images
Private-equity firm Sycamore Partners is looking to back out of its deal to take over Victoria’s Secret from L Brands, according to a lawsuit filed in a Delaware court on Wednesday.
The deal for Victoria’s Secret to be taken private was reached in February, just weeks before the coronavirus pandemic started hammering the U.S. economy and forced the closure of thousands of retailers’ stores.
Sycamore said in the filing that L Brands’ decision to close its stores and skip rent payments in April violated the transaction. Sycamore is now seeking the court’s approval to break the deal, according to the filing.
L Brands said in a statement on Wednesday that it intends to fight the suit, and that Sycamore’s efforts to end the agreement are “invalid.”.
“L Brands will vigorously defend the lawsuit and pursue all legal remedies to enforce its contractual rights, including the right of specific performance,” the statement said.
The company said it “intends to continue working towards closing the transactions” outlined in the proposed deal.
Sycamore did not immediately respond to a request for comment.
Shares of L Brands were temporarily halted on Wednesday morning. The stock was last down more than 20%.
This is a developing story. Please check back for updates.