The British retailer and American lingerie brand will establish a joint venture to manage Victoria's Secret business in the UK.
The company L Brands, owner of Victoria's Secret brand, announced that an agreement had been reached with Next, one of the largest retailers in the UK, to create a joint venture. And by the spring of 2021, all control over the activities of stores in the UK and Ireland and the brand's online business will fall under his control. According to the deal, Next will own 51% of the shares of this enterprise. The financial details of the agreement will not be disclosed.
Victoria's Secret brand is going through some bad times. Even before the pandemic, this part of the business was considered the weakest in the portfolio of L Brands. Earlier in 2020, an attempt was made to sell the brand to the investment company Sycamore Partners, but the deal failed. The British division of Victoria's Secret went into "administration," which is the British equivalent of bankruptcy. In June 2020, all 25 stores were forced to close due to the pandemic, and 800 employees were sent to unpaid leave.
L Brands hopes that the new joint venture will help Victoria's Secret get back on its feet. The joint venture will be a way to avoid the brand's liquidation to meet the creditors' demands and, ultimately, restore its vitality.