With their stores still closed, these struggling retailers are pursuing new plans.
L Brands, the parent company of lingerie retailer Victoria’s Secret, has canceled its deal with private equity firm Sycamore Partners, which agreed in February to buy 55 percent of the company for $525 million and take it private, Bloomberg reported.
In a court filing last week, Sycamore had argued that L Brands’ decision to furlough employees, cut salaries and close stores during the pandemic was a violation of their agreement. The parties have now agreed to settle all pending litigation and neither will have to pay a termination fee.
L Brands plans to operate Bath & Body Works as a standalone public company, while spinning off Victoria’s Secret as a separate entity. Further details will be on the company’s May 21 earnings call.
Meanwhile, department store chain Neiman Marcus is reportedly closing in on a deal with a group of lenders led by Pimco, which would cut the firm’s debt load by more than half in exchange for control of the company, according to a separate report in Bloomberg.
The deal would see Neiman Marcus restructured after a Chapter 11 bankruptcy filing, which could come as early as this week.
Last week, a group of investors including Mudrick Capital Management submitted a $700 million proposal to Neiman Marcus for debtor-in-possession financing, in a deal that would require an outright sale of the company. [Bloomberg 1, 2] — Kevin Sun