L Brands, Inc. announced a mutual agreement with Sycamore Partners to terminate their previously announced transaction and outlined its go-forward strategy for the company to drive long-term shareholder value.
As part of L Brands’ strategy, the company remains committed to establishing Bath & Body Works as a pure-play public company and is taking the necessary steps to prepare Victoria’s Secret to operate as a separate, standalone company. In addition, changes to the Board of Directors and leadership will take effect as of L Brands’ 2020 Annual Meeting of Stockholders.
Sarah Nash, current director and future Chair of L Brands’ Board, said, “Like all retailers, the company faces an extremely challenging business environment. Our board believes that it is in the best interests of the company, our stockholders and our associates to focus our efforts entirely on navigating this environment to address those challenges and positioning our brands for success rather than engaging in costly and distracting litigation to force a partnership with Sycamore. We are implementing significant cost reduction actions and performance improvements at Victoria’s Secret while continuing to drive strong growth at Bath & Body Works. We will continue to make decisions and take actions with the best interests of all our stakeholders and the future of our company in mind.”
The previously announced leadership and governance changes will go into effect as of the 2020 Annual Meeting of Stockholders, which will be held in a virtual-only format on 14th May, 2020.
Leslie Wexner will step down as Chief Executive Officer and Chairman of the Board of L Brands. He will remain a member of the Board as Chairman Emeritus; Andrew Meslow, CEO of Bath & Body Works, will become CEO of L Brands and join the Board.
Sarah Nash will become Chair of the Board, and Allan Tessler, current lead independent director, Gordon Gee and Raymond Zimmerman will retire from the Board.
The Board has appointed Stuart Burgdoerfer, current Chief Financial Officer of L Brands, as Interim Chief Executive Officer of Victoria’s Secret, effective immediately. Burgdoerfer will also continue to serve as CFO of L Brands and will have a dual reporting relationship to Nash as the incoming Board Chair and Meslow as the new CEO of L Brands.
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The company will continue to take proactive measures to appropriately manage costs and expenditures to ensure liquidity in light of the ongoing COVID-19 pandemic, while also continuing to take steps to improve the brands’ performance. L Brands will provide further details on go-forward plans on the scheduled earnings call on May 21 at 9 a.m. Eastern.