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Shoppers look at merchandise at a Victoria's Secret store in Hialeah, Fla. on June 7, 2017.

The Associated Press

Investment firm Sycamore Partners is seeking to end its deal to buy a stake in L Brands Inc.’s lingerie brand Victoria’s Secret, citing business decisions the retailer took during the coronavirus pandemic, a court filing on Wednesday showed, sending the company’s shares down more than 20 per cent.

Sycamore said less than one month after entering the deal with L Brands, the company closed nearly all of its about 1,600 Victoria’s Secret and PINK stores globally, including more than a thousand stores in North America.

L Brands also furloughed most of its Victoria’s Secret employees and reduced compensation for senior staff and took other actions that could hurt the lingerie business, Sycamore said in the filing.

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“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,” the firm said in its filing.

Earlier this year, L Brands had said it would sell a controlling stake in its Victoria’s Secret unit to Sycamore, valuing the lingerie brand at US$1.1-billion, to focus on its better-performing Bath & Body Works brand. The deal would have led to the private equity firm owning more than half of Victoria’s Secret, the world’s best-known specialty retailer for lingerie.

L Brands and Sycamore were not immediately available for a comment.

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