L Brands Announces Settlement of Stockholder Derivative Claims
July 30 2021 - 7:30AM
L Brands, Inc. (NYSE: LB) announced today the global settlement of
all stockholder derivative claims alleging workplace misconduct at
the company, including claims made in derivative stockholder
litigations pending in Ohio and Delaware and in stockholder demands
sent to the Board of Directors (the “Board”) since February 2020.
In the settlement, L Brands has agreed to a suite of corporate
governance and management measures, including the maintenance of a
Diversity, Equity and Inclusion (“DEI”) Council, the strengthening
of policies and procedures for reporting and investigating sexual
harassment complaints and the hiring of a DEI consultant. These
measures, which continue the governance and management reforms the
Board has been implementing over the past year, will benefit L
Brands stockholders and reflect L Brands’ ongoing commitment to
fostering a safe, equitable and inclusive workplace.
Following the planned August 2, 2021 spin-off of
Victoria’s Secret & Co., the settlement terms will apply to
both Bath & Body Works, Inc. and Victoria’s Secret & Co.
Each company has committed to invest $45 million over at least five
years to fund its governance policies.
The settlement was negotiated by a Special
Committee of the Board, helmed by Board Chair Sarah Nash, that had
been formed to investigate the stockholders’ allegations. The
settlement will mark the full and final resolution of the
stockholders’ claims of workplace misconduct and the conclusion of
the Special Committee’s work.
“This global resolution, with its commitment to
industry-leading governance policies, is an overwhelmingly positive
result for the Company and its stockholders,” said Ms. Nash. “It
further prepares both Bath & Body Works and Victoria’s Secret
for success as independent public companies with strong management
teams and boards of directors committed to principles of diversity,
equity and inclusion.”
L Brands and Bath & Body Works CEO Andrew
Meslow said, “As L Brands prepares to separate into two independent
public companies, we are proud to implement these governance
policies to ensure a workplace where all employees feel safe and
supported and that their voices are heard.”
The settlement will be filed in the United
States District Court for the Southern District of Ohio in the case
captioned Rudi v. Wexner, et al., Case No. 2:20-cv-3068, and is
subject to court approval.
ABOUT L BRANDS:L Brands, through Bath &
Body Works, Victoria’s Secret and PINK, is an international
company. The company operates 2,684 company-operated specialty
stores in the United States, Canada and Greater China, in more than
700 franchised locations worldwide and through its websites
worldwide.
Safe Harbor Statement Under the Private Securities
Litigation Reform Act of 1995
We caution that any forward-looking statements
(as such term is defined in the Private Securities Litigation
Reform Act of 1995) contained in this press release or made by our
company or our management involve risks and uncertainties and are
subject to change based on various factors, many of which are
beyond our control. Accordingly, our future performance and
financial results may differ materially from those expressed or
implied in any such forward-looking statements. Words such as
“estimate,” “project,” “plan,” “believe,” “expect,” “anticipate,”
“intend,” “planned,” “potential” and any similar expressions may
identify forward-looking statements. Risks associated with the
following factors, among others, in some cases have affected and in
the future could affect our financial performance and actual
results and could cause actual results to differ materially from
those expressed or implied in any forward-looking statements
included in this press release or otherwise made by our company or
our management:
- the spin-off of the Victoria’s
Secret business (the “spin-off”) may not be consummated within the
anticipated time period or at all;
- disruption to our business in
connection with the proposed spin-off and that we could lose
revenue as a result of such disruption;
- the spin-off may not be tax-free
for U.S. federal income tax purposes;
- a loss of synergies from separating
the businesses that could negatively impact the balance sheet,
profit margins or earnings of both businesses or that the companies
resulting from the spin-off do not realize all of the expected
benefits of the spin-off;
- the combined value of the common
stock of the two publicly-traded companies will not be equal to or
greater than the value of our common stock had the spin-off not
occurred;
- Victoria’s Secret has no history of
operating as an independent company, and its historical combined
and unaudited pro forma financial information is not necessarily
representative of the results that it would have achieved as an
independent, publicly traded company and may not be a reliable
indicator of our future results;
- general economic conditions,
consumer confidence, consumer spending patterns and market
disruptions including pandemics or significant health hazards,
severe weather conditions, natural disasters, terrorist activities,
financial crises, political crises or other major events, or the
prospect of these events;
- the novel coronavirus (COVID-19)
global pandemic has had and is expected to continue to have an
adverse effect on our business and results of operations;
- the seasonality of our
business;
- divestitures or other dispositions,
including a spin-off of Victoria’s Secret and related operations
and contingent liabilities from businesses that we have
divested;
- difficulties arising from turnover
in company leadership or other key positions;
- our ability to attract, develop and
retain qualified associates and manage labor-related costs;
- the dependence on mall traffic and
the availability of suitable store locations on appropriate
terms;
- our ability to grow through new
store openings and existing store remodels and expansions;
- our ability to successfully operate
and expand internationally and related risks;
- our independent franchise, license
and wholesale partners;
- our direct channel businesses;
- our ability to protect our
reputation and our brand images;
- our ability to attract customers
with marketing, advertising and promotional programs;
- our ability to maintain, enforce
and protect our trade names, trademarks and patents;
- the highly competitive nature of
the retail industry and the segments in which we operate;
- consumer acceptance of our products
and our ability to manage the life cycle of our brands, keep up
with fashion trends, develop new merchandise and launch new product
lines successfully;
- our ability to source, distribute
and sell goods and materials on a global basis, including risks
related to:
- political instability,
environmental hazards or natural disasters;
- significant health hazards or
pandemics, which could result in closed factories, reduced
workforces, scarcity of raw materials, and scrutiny or embargoing
of goods produced in infected areas;
- duties, taxes and other
charges;
- legal and regulatory matters;
- volatility in currency exchange
rates;
- local business practices and
political issues;
- potential delays or disruptions in
shipping and transportation and related pricing impacts;
- disruption due to labor disputes;
and
- changing expectations regarding
product safety due to new legislation;
- our geographic concentration of
vendor and distribution facilities in central Ohio;
- fluctuations in foreign currency
exchange rates;
- the ability of our vendors to
deliver products in a timely manner, meet quality standards and
comply with applicable laws and regulations;
- fluctuations in product input
costs;
- our ability to adequately protect
our assets from loss and theft;
- fluctuations in energy costs;
- increases in the costs of mailing,
paper, printing or other order fulfillment logistics;
- claims arising from our
self-insurance;
- our and our third-party service
providers' ability to implement and maintain information technology
systems and to protect associated data;
- our ability to maintain the
security of customer, associate, third-party and company
information;
- stock price volatility;
- our ability to pay dividends and
related effects;
- shareholder activism matters;
- our ability to maintain our credit
rating;
- our ability to service or refinance
our debt and maintain compliance with our restrictive
covenants;
- our ability to comply with laws,
regulations and technology platform rules or other obligations
related to data privacy and security;
- our ability to comply with
regulatory requirements;
- legal and compliance matters;
and
- tax, trade and other regulatory
matters.
We are not under any obligation and do not intend to make
publicly available any update or other revisions to any of the
forward-looking statements contained in this press release to
reflect circumstances existing after the date of this press release
or to reflect the occurrence of future events even if experience or
future events make it clear that any expected results expressed or
implied by those forward-looking statements will not be
realized.
For further information, please contact:
L Brands: |
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Investor Relations |
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Media Relations |
Amie Preston |
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Brooke Wilson |
apreston@lb.com |
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communications@lb.com |
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