Private equity firm Sycamore is trying to get out of its takeover deal over Victoria's Secret from L Brands, according to a lawsuit filed Wednesday in a Delaware court, reports The Wall Street Journal.
The deal to purchase 55% of Victoria's Secret was reached in February, weeks before the U.S. economy took a major hit from the coronavirus pandemic.
Sycamore cited store closures, furloughs, reduced salaries, and stop rent payments as violations of the proposed transaction.
L Brands, which owns Victoria's Secret, fell 15% to $10.19 in Wednesday trading.
L Brands in a statement said it believes the termination of the transaction is invalid and it "will vigorously defend the lawsuit and pursue all legal remedies to enforce its contractual rights, including the right of specific performance. L Brands intends to continue working towards closing the transactions contemplated by the Transaction Agreement."
L Brands in March said it was temporarily closing all its U.S. stores due to the pandemic.
Solange Reyner ✉
Solange Reyner is a writer and editor for Newsmax. She has more than 15 years in the journalism industry reporting and covering news, sports and politics.
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