- A landlord sued Victoria’s Secret, alleging it stopped paying rent and ditched a New York store.
- A spokesperson for Victoria’s Secret told Insider that it cannot comment on ongoing litigation.
- Victoria’s Secret has been tightening its business and closing stores to cut back on costs.
- See more stories on Insider’s business page.
A mall landlord is suing Victoria’s Secret for $32 million, alleging it has breached its lease contract by closing one of its stores in New York and refusing to pay rent. The store is located in Westfield’s World Trade Center mall in Downtown Manhattan.
According to Westfield’s lawsuit, Victoria’s Secret informed the landlord that it was ending its lease at the start of this year. The lingerie giant said it was invoking its right to a clause in the contract that allows it to cancel its lease early if Westfield fails to keep 75% of the stores in its mall stores open and running for more than 12 consecutive months.
But Westfield alleged in the suit that it had proved to Victoria’s Secret that it was not in breach of this clause and that the retailer, therefore, “had no right” to terminate the lease.
“Nonetheless, Victoria’s Secret refused to pay rent and abandoned its leased premises with years remaining, all in breach of its lease, ” the suit said. “As a result of Victoria’s Secret’s breaches, Westfield has been damaged in an amount that exceeds $30 million.”
A spokesperson for Victoria’s Secret told Insider that it cannot comment on pending litigation.
While Victoria’s Secret’s woes predated the pandemic, this crisis only adds to its problems and the company has been tightening up its business and streamlining costs ever since. This has included a wave of store closings in 2020 and a retreat from the mall.
Its parent company, L Brands, has taken steps to pull Victoria’s Secret and its sister brand, Bed Bath & Body Works, out of underperforming malls. In its most recent earnings call, L Brands said that around 47% of the more than 1,700 Bath & Body Works stores were now located in off-mall locations.
Last month, L Brands said it planned to spin itself into two separate public companies – Victoria’s Secret and Bed Bath & Body Works – after earlier attempts to sell Victoria’s Secret to private equity buyers didn’t elicit offers that L Brands considered equivalent in value to what it could get in a spinoff to shareholders, according to a New York Times report.
Westfield is considered to be one of the most valuable mall chains in the US, however, and is one of few that has managed to survive in a tricky retail environment.