Victoria’s Secret had a new majority owner in Sycamore Partners. However, the private equity firm is trying to walk away. As a result, shares of L Brands (NYSE:LB) – the current owner – plunged more than 20%.

Backing Out on Victoria’s Secret

The private equity firm said that Victoria’s Secret breached its agreement. Sycamore says that store closures in the wake of COVID-19 violate the agreement. It also said that the firm failed to pay rent in April, furloughed employees, and reduced its inventory.

“When coupled with L Brands’ failure to dispose of existing out-of-season, obsolete and excess merchandise, [this] has saddled the Victoria’s Secret Business with a stock of merchandise of greatly diminished value,” a regulatory filing says.

L Brands responded by stating that it will defend a lawsuit and pursue legal remedies.

Elsewhere in Private Equity

Meanwhile, private equity firms Apollo Global Management and Silver Lake Partners are looking at a stake in Expedia (NASDAQ: EXPE). The company has struggled in the wake of COVID-19 as travel bookings have plunged around the globe. According to reports, a deal would be in the range of about $1 billion and set up the PE shops for a big win when travel demand rebounds.

Elsewhere, PE shops are looking at a stake in Norwegian Cruise Lines (NYSE:NCLH). The cruise operator reportedly hired Goldman Sachs to help locate financing. This could include a deal to sell a stake in the organization. However, the firm already has a significant amount of debt, which sat at around $6.9 billion at the end of last year.

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