Sycamore looks to back out of Victoria’s Secret deal
April 23, 2020
L Brands on Wednesday said that Sycamore Partners had delivered a notice to terminate their agreement, announced in February, where the private equity firm was set to take a 55% interest in Victoria’s Secret for about $525 million, with L Brands retaining 45%. The retailer called the attempt “invalid,” according to a statement emailed to Retail Dive.
L Brands said it “will vigorously defend the lawsuit and pursue all legal remedies to enforce its contractual rights, including the right of specific performance,” and that it’s continuing to work toward closing the deal, according to the company email.
But Sycamore may be on solid footing, according to Alon Kapen, a partner at law firm Farrell Fritz. L Brands may have needed to spell out what it might be allowed to do, even under extreme circumstances, or perhaps should have “picked up the phone” and discussed its moves with Sycamore, in light of their pending agreement, he said.
“Remember this is a contract between two grown-ups, and these are extraordinary actions,” Kapen told Retail Dive in an interview. “L Brands will need to point to the provisions of the agreement that would allow them to take actions like this.”
