Investment firm Sycamore Partners seeks to cancel its agreement to acquire a stake in L Brands Inc’s popular lingerie brand, Victoria’s Secret. In a court filing on Wednesday, Sycamore stated that the retailer’s decisions during the coronavirus pandemic have prompted this action. With the closure of almost all of its 1,600 Victoria’s Secret and PINK stores worldwide, as well as the furlough of employees and reduced compensation for senior staff, Sycamore believes L Brands’ actions could negatively impact the lingerie business. This development caused L Brands’ shares to plummet by over 20%.

Sycamore contends that L Brands’ response to the COVID-19 pandemic is unsubstantiated, accusing the company of breaching the terms of the transaction agreement. Previously, L Brands had announced its intention to sell a controlling stake in Victoria’s Secret to Sycamore, thereby valuing the brand at $1.1 billion. The purpose of this move was to enable L Brands to focus on its thriving Bath & Body Works brand. Consequently, this deal would have granted Sycamore over 50% ownership of Victoria’s Secret, the world’s most renowned lingerie retailer. Both L Brands and Sycamore have yet to comment on the current situation.

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