Fashion retailer L Brands is seeing a sales rebound in both its signature brands, Victoria's Secret and Bath & Body Works. In March the company raised its guidance for the year, citing revenue increases thanks to federal stimulus and the easing of pandemic restrictions in some area.

As the pandemic wore on last year, the sales drop-off and cash crunch raised the financial risks for L Brands. The company appeared on Retail Dive's bankrupty watch list in October, based on ratings from CreditRiskMonitor.

The sale of Victoria's Secret, or a major stake in the banner, could give L Brands a further financial boost. The company indicated last year it intended to move forward with separating Victoria’s Secret in some fashion. In February, the company announced Martin Waters, then CEO of Victoria's Secret Lingerie, as the new CEO of the Victoria's Secret business. It also targeted August 2021 for a separation of Victoria's Secret, with all options — including a spin-off IPO of Victoria's Secret or a private sale.

However, within a month, the entire retail and financial world upended with the spread of COVID-19 in the U.S. L Brands, along with most other major discretionary retailers, shuttered its stores to combat the spread of the new coronavirus. It also furloughed most of its employees, drew down its revolver and took numerous other steps to preserve liquidity and wait out the pandemic and stay-at-home orders.

By April, Sycamore looked to back out of the deal. The private equity firm, no stranger to retail, called the store closures and staff layoffs a violation of their sale agreement. The retailer and financial firm traded words and legal action, before mutually agreeing to call off their deal by May.