Victoria’s Secret & Co has sold 49 percent of its China business to Hong Kong-based lingerie company Regina Miracle for 45 million dollars in cash.
The two companies have formed a joint venture with an aim to help Victoria’s Secret expand in the Chinese market.
Under the joint venture, Regina Miracle will operate all Victoria’s Secret stores and the related online business in China.
“I am delighted to announce this partnership with Regina Miracle, who has been a valued merchandise supplier partner for more than twenty years,” said Victoria’s Secret CEO Martin Waters in a statement.
He said he expects the partnership to “positively impact the speed and agility of the business to benefit consumers and provide us with a platform for a strong future in this important market”.
‘Promising China market’
The transaction is expected to close in the first quarter of fiscal 2022.
Victoria’s Secret said it doesn’t expect the deal to have a “material impact” on its operating income and earnings per share guidance for the fourth quarter of fiscal 2021.
YY Hung, the chair, CEO and executive director of Regina Miracle, said: “We are honoured and excited to be elevating our long-standing partnership with Victoria’s Secret through the formation of this joint venture in the promising China market.
“We are confident that our highly complementary strengths - Regina Miracle’s industry-leading innovation capabilities and market foresight as an innovative design manufacturer, and Victoria’s Secret’s undisputed brand leadership, retailing and marketing expertise - will perfectly position this partnership in capturing the growth opportunities in China.”
The news comes after Victoria’s Secret completed its separation from Bath & Body Works in the summer, becoming a newly independent public company.
In Victoria’s Secret’s most recent trading update, for the third quarter ended October 30, the company reported net revenue of 1.4 billion dollars, up 7 percent compared to a year earlier, but still 9 percent below pre-pandemic 2019 levels.
Its net income came in at 75.2 million dollars, down from 143.4 million dollars a year earlier.