Upmarket lingerie firm Victoria’s Secret UK on Friday appointed Deloitte as administrator in a ‘light touch’ administration.
The UK business has 25 leasehold sites and employs over 800 people. Most of the staff were on furlough as at the time of the appointment and no redundancies have been announced.
The UK division is part of the global Victoria’s Secret group, owned by US beauty and fashion company L Brands.
Like rival retailers, the chain, famous for its fashion shows, had to shut sites in March when the Covid-19 lockdown started.
Deloitte said it is currently envisaged that, in order for the business to exit the administration process, “it will 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”.
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.”
Harding added: “We will now work with the existing management team and broader stakeholders to assess all options available for the future of the business. As administrators we’d like to thank them and all of the employees for their support, at what we appreciate is a difficult time.”
Victoria’s Secret’s online operations, which are not owned or operated by the company, are not affected.
Today’s update comes just over a month after L Brands said it had agreed to call off the sale of its majority stake in the Victoria’s Secret lingerie business to New York-based private-equity group Sycamore Partners.
L Brands, which also owns personal care firm Bath & Body Works, said at the time it was committed to taking the necessary steps to prepare the Victoria’s Secret Lingerie, Victoria’s Secret Beauty and PINK businesses (collectively, Victoria’s Secret) to operate as a separate, standalone company.
Stuart Burgdoerfer, L Brands’ finance chief and interim chief executive of Victoria’s Secret, today said: “We are taking a number of actions across Victoria’s Secret and Victoria’s Secret PINK to strengthen and position the business to succeed as a separate standalone company.”
He added: “As part of that profit improvement plan, we are addressing the operating losses in our 25 UK stores by appointing Deloitte to work with VSUK in a “light touch” administration.”