Victoria’s Secret sells 49% stake in China business for $45 million
Recently, the US underwear brand Victoria’s Secret issued a statement announcing that the group’s sale of 49% of the Chinese business to the underwear manufacturer Virginia for US$45 million has been completed, and the remaining 51% of the shares will continue to be held by Victoria’s Secret.
Martin Waters, CEO of Victoria’s Secret, said that the cooperation with Virginie is a key step in the reorganization of the brand’s international business. In the future, it will continue to adjust its business in other markets around the world, in the same way, to help the brand better reach local consumers. By.
As part of the agreement, the two companies will form a partnership, under which Virginia will operate all of Victoria’s Secret stores and related online businesses in China.
Victoria’s Secret became a separate public company after it spun off from Bath & Body Works last year. The company said Tuesday that the sale is expected to close in the first quarter of its 2022 fiscal year.
According to the third quarter 2021 financial report previously released by Wei Mi, in the three months ended October 30, 2021, Wei Mi recorded revenue of $1.441 billion, an increase of nearly 7% from $1.353 billion in the same period last year; net profit was $75.2 million, compared with adjusted net income of $72.6 million in the prior-year period. The adjustment items include the income from the conversion of the original direct-operated stores in the British Isles into a joint venture company.
However, in terms of regional division, the stores in the North American base camp are the main force for Victoria’s Secret to resume growth. Direct sales channels and overseas business are still in a weak trend of declining performance.
In 2020, L Brands, the original parent company of Wei Mi, made adjustments to its China business, including closing its flagship store in Hong Kong to save nearly $25 million in expenses.
As of October 30, 2021, Victoria’s Secret has 63 directly-operated stores in Greater China. Victoria’s Secret had planned to continue investing in the Chinese market in 2021. It is planned that by the end of 2021, there will be around 80 stores in China.