Victoria's Secret buyer Sycamore Partners wants to back away from the deal, crushing hopes of a turnaround for the lingerie brand

• Sycamore Partners, the private equity firm that agreed to take a majority stake in Victoria's Secret's earlier this year, is now looking to back out of the deal, according to a court filing. Bloomberg was first to report the news.

• Sycamore Partners agreed to acquire a 55% stake in the Victoria's Secret brand in February, in a deal that valued the company at $1.1 billion.

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Sycamore Partners, the private equity firm that agreed to take a majority stake in Victoria's Secret's earlier this year, is now looking to back out of the deal.

In a complaint filed in court on Tuesday, Sycamore Partners said that Victoria's Secret's actions taken during the pandemic to close stores, cut back on new inventory, and not pay rent for the month of April were in violation of the previous agreement that the two parties had made in February.

"That these actions were taken as a result of or in response to the COVID-19 pandemic is no defense to L Brands' clear breaches of the Transaction Agreement. Specifically, L Brands agreed that a condition to Plaintiff's obligation to close the Transaction is that L Brands "shall have performed in all material respects all of its other obligations [under the Transaction Agreement] required to be performed by it on or prior to the Closing Date," it said in the court filing.

Sycamore Partners agreed to acquire a 55% stake in the Victoria's Secret brand in February in a deal that valued the company at $1.1 billion. L Brands, Victoria's Secret's parent company, agreed to retain a 45% stake in the company.

"L Brands believes that Sycamore Partners' purported termination of the Transaction Agreement is invalid," said L Brands in a statement to Business Insider. "L Brands 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."

Analysts were expecting the struggling lingerie brand to execute a major turnaround under new leadership. Its longtime CEO, Les Wexner, also stepped down from the company at that time.

Victoria's Secret's brick and mortar business came to a grinding halt in March as it was forced to close stores during the lockdown. The lingerie brand also closed its ecommerce site for a week in March.

This story is developing.

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