Victoria’s Secret is being sued for $32 million by shopping centre giant Westfield amid accusations it wrongfully terminated its lease and refused to pay rent.
Westfield is suing the lingerie retailer after it invoked a clause in its contract last year, allowing it to cancel its lease early if Westfield failed to keep 75 per cent of its stores open in its mall for 12 consecutive months.
According to Business Insider, Westfield provided evidence that the Downtown Manhattan shopping centre had not breached this clause, meaning Victoria’s Secret “had no right” to end its lease early.
“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.”
Victoria’s Secret has undergone a significant overhaul over the past year due to financial woes that started long before the pandemic.
Earlier this month its owner L Brands announced plans to spin off the lingerie brand into a separate company, rather than continue to run it alongside the more financially resilient Bath & Body Works.
While Victoria’s Secret has seen sales improve in the first quarter of 2021, 2020 proved a difficult year for the brand which continued to rely largely on physical stores.
In February 2020 L Brands agreed to sell a 55 per cent stake in the brand to Sycamore for $1.1 billion, however the deal fell through when Victoria’s Secret began shutting stores and furloughing staff during the pandemic.