- Angela Gonzalez-Rodriguez |
New York – The filing for creditor protection covering their UK’s business is a wrap to quite a hectic week for Victoria’s Secret. The lingerie brand’s parent group, L Brands Inc. is facing a lawsuit for records of “a toxic culture”, as it emerged on Thursday. Prior to that, L Brands saw their deal to spin off Victoria’s Secret cancelled amidst the major closures prompted by the global health pandemic.
The British subsidiary of Victoria’s Secret owner L Brands Inc. made public Friday it has filed for protection from creditors.
Victoria’s Secret in the UK files for ‘light-touch administration’
As per the filed documents, L Brands is requesting a so-called “light-touch administration”, which is a UK specific framework that offers a moratorium on claims for unpaid debts. However and unlike protection for bankruptcy, this resource allows management to keep running the business with the consent of administrators.
It’s worth recalling that Victoria’s Secret stores have remained closed in many geographies over the past months, adding to the already weak financial situation of the brand. In an attempt to offload the growing debt, and amidst the COVID-19 pandemic, L Brands' (NYSE:LB) hoped to sell a controlling stake in its lingerie brand.
Failed sale of control stake and new lawsuit add to Victoria’s Secret woes
This deal didn’t come to fruition, leaving the holding company to float a bond offering totalling 1.25 billion dollars for cash to fund its business. The news comes several weeks after the company's latest quarterly report showed a 300 million dollars loss and a 37 percent dip in total revenue year over year, as reported by ‘The Motley Fool’.
On another note, L Brands Inc. is also facing a lawsuit for records that alleges a "toxic culture" that has "plagued" the company "for years", Bloomberg Law reported Thursday.
The lawsuit was filed in Delaware by L Brands shareholder John Giarratano on Thursday with the intention of getting records and investigating the company in relation to its alleged "toxic culture of sexual harassment, discrimination, and retaliation" among senior leaders.
Image: Victoria’s Secret official