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Bankrupt Victoria’s Secret UK Rescued by Joint Venture

Victoria’s Secret U.K., in administration since June, will get a new lease on life through a joint venture between L Brands Inc. and Next PLC.

The two firms have formed a joint venture that will acquire the majority of the assets operating under administration, otherwise known as bankruptcy in the U.S. The JV will operate VS stores in the U.K. and Ireland, subject to agreements with various landlords. The online operation, currently operated by VS’s U.S. parent, L Brands, will be folded into the JV next spring. Next PLC will be the majority owner holding a 51 percent stake, with L Brands owning the balance of 49 percent.

Word surfaced of Next’s interest in VS back in July, but it wasn’t immediately clear what the terms of an acquisition would entail. On Tuesday, Next CEO Lord Simon Wolfson said the company is “pleased at the prospect of working in partnership to expand” the Victoria’s Secret brand.

“This is an ideal way to secure the future of more than 500 employees in the U.K. We are grateful to the creditors for working with us to deliver a solution that enables this business to survive and prosper,” said Deloitte administrator Rob Harding, who is involved with the insolvency process.

“We are pleased to take this next step in our profit improvement plan for Victoria’s Secret,” said L Brands International CEO Martin Waters, adding that Next’s experience in the U.K. market is “substantial, and our partnership will provide meaningful growth opportunities for the business.”

At the time Victoria’s Secret fell into administration, it had about 800 employees and 25 store locations. The company is still in the process of working out rent deals with its landlords.