US beauty and fashion company L Brands, behind the Victoria’s Secret group which is known for its fashion shows, said it has formed a joint venture with Next which will acquire the majority of the assets of the lingerie brand’s UK business that is currently in administration.
Next will own 51% of the venture, while Victoria’s Secret will have 49%. No financial terms were given and the deal is subject to regulatory clearance.
The newly formed partnership will operate all of the firm’s stores in the UK and Ireland, subject to agreeing to terms with landlords.
Victoria’s Secret UK fell into administration in June, hurt by disruption from the Covid-19 pandemic. Administrator Deloitte said at the time it would be necessary to either restructure the lease terms across the portfolio, and, or, achieve a sale of the company’s assets to a third party.
At that point Victoria’s Secret UK has 25 leasehold sites and employed over 800 people. Most of the staff were on furlough as at the time of the administration and no redundancies were announced.
Lord Simon Wolfson, chief executive of Next said his company “is very pleased at the prospect of working in partnership to expand” the lingerie brand.
Martin Waters, the boss of L Brands International, said: “We are pleased to take this next step in our profit improvement plan for Victoria’s Secret. Next’s capabilities and experience in the UK. market are substantial, and our partnership will provide meaningful growth opportunities for the business.”
The UK online arm, currently operated by Victoria’s Secret in the US, will be folded into the joint venture in Spring 2021.
Rob Harding, administrator at Deloitte, said: “This is an ideal way to secure the future of more than 500 employees in the UK.”
Like rival retailers, the chain had to shut sites in March when the Covid-19 lockdown started.