- The UK arm of Victoria’s Secret went into administration on Friday, filing for protection from its creditors, in a move that could end up in this portion of the business being sold.
- Victoria’s Secret CEO said that the news would not have an impact on any of its other stores around the world and that its UK online store would operate as normal.
- While the lingerie retailer has been hard hit by the pandemic, its struggles predate this period.
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The UK arm of Victoria’s Secret went into administration on Friday, putting more than 800 jobs at risk.
This effectively means that it has filed for protection from its creditors.
Victoria’s Secret’s CEO Stuart Burgdoerfer said in a statement that the company had appointed Deloitte to work with Victoria’s Secret UK in a “light touch” administration deal in which they will “seek to restructure the UK lease terms, explore options for a sale of that portion of the business, or other alternatives.”
Victoria’s Secret stressed that this would not have an impact on any of its other stores around the world and that the UK’s online store would continue to operate as normal.
“We continue to be energised and intensely focused on turning the Victoria’s Secret business around,” Burgdoerfer said.
Rob Harding, joint administrator at Deloitte, said: “This is yet another blow to the UK high street and a further example of the impact the COVID-19 pandemic is having on the entire retail industry.
“The effect of the lockdowns, combined with broader challenges facing bricks and mortar retailers, has resulted in a funding requirement for this business, resulting in today’s administration,” he added.
But Victoria’s Secret’s troubles predate the pandemic. The lingerie retailer has been struggling for several years, seen sales decline, and been increasingly accused of losing relevance with customers.
The company’s plans to sell a majority stake in the company and execute a turnaround under new management came crashing down last month after the private equity firm that had agreed to buy 55% of the brand backed out of the deal.
L Brands, its parent company, has since reshuffled its management team and is now focused on cutting costs at Victoria’s Secret and bringing about change.