Jefferies analyst Randal Konik believes questions surrounding the potential solvency of L Brands over the medium term are “now on the table” after Sycamore filed a lawsuit to terminate its purchase of 55% of Victoria’s Secret. Sycamore is making a smart move as improving Victoria’s Secret results would have been very difficult, Konik tells investors in a research note. With over $2.5B of leases across over 1,000 stores, the hope was that Sycamore would take on the lease burden, adds the analyst. Konik believes that if L Brands is left holding 100% of Victoria’s Secret, the results “could be severe.” The unit was set to lose money annually starting in 2020 even before COVID-19, and when combined with Bath & Body Work pressures from lower mall traffic and fewer candle sales, L Brand’s debt problems create medium-term solvency concerns, contends Konik. The analyst keeps an Underperform rating on the shares with an $8 price target. The stock closed yesterday down 15.5% to $10.19.