The well-known underwear brand Victorias Secret previously announced that it would permanently close 250 stores in the United States and Canada. Now there is bad news. Foreign media pointed out that the British branch is filing for bankruptcy and has entered administration procedures. It is reported that the brand has 25 stores in the UK and more than 800 employees. The real trigger is the decline in sales affected by the epidemic.
On November 21, 2019, the parent company of Victoria’s Secret confirmed that the Victoria’s Secret Show will be officially cancelled.
Performance decline seriously accelerated filing for bankruptcy
Victoria’s The Victorias Secret brand was founded in 1977 and has become the largest chain of women’s ready-to-wear retail stores in the United States. Since the suspension of the Victoria’s Secret Fashion Show last year (2019), its momentum has been declining. Sales in the first quarter of this year (2020) have dropped. 37%, which has been a loss for three consecutive quarters, and foreign media pointed out that Victoria’s Secret lost as much as NT$8.8 billion, and total sales fell by 46%.
In this regard, the parent company L Brands (LB) also announced that “it will permanently close 250 stores in the United States and Canada. This may be just the beginning.” The “BBC” report pointed out that due to the impact of the epidemic, Victoria’s Secret in the United Kingdom Being forced to close down business has resulted in a drop in sales, prompting the brand to accelerate its filing for bankruptcy and has now entered the legal process of bankruptcy administration.
The picture comes from the Internet
It is reported that Victoria’s Secret has 25 stores in the UK, at least more than 800 Robert Harding, chief executive of Deloitte, who is responsible for Victoria’s Secret’s bankruptcy protection plan, said, “Although we have become economic victims due to the impact of the epidemic, we have not announced any layoff plans at this time.” Deloitte revealed that it will help the company invest in restructuring and adjust lease terms. matter, it is also possible to sell Victoria’s Secret’s assets to a third party.
Victoria’s Secret, which has been brilliant for 15 years, encounters a “mid-life crisis”
After nearly 15 years of glory, Victoria’s Secret, which has always stood at the top of the pyramid, has been stuck in a “midlife crisis” in recent years.
Not only has it struggled in business, but its ratings have also declined year after year.
The ratings of the 2015 Victoria’s Secret Show plummeted by 30%, with the number of viewers plummeting to 6.59 million. In 2017, the ratings of the Victoria’s Secret Shanghai Show plummeted by 30%. In 2018, the ratings of the Victoria’s Secret Show, which returned to ABC, were only 6.65 million, a far cry from the 20.3 million at its peak.
Accompanied by this is a decline in revenue. After recording sales of US$7.78 billion in fiscal year 2016, Victoria’s Secret’s performance began to take a turn for the worse. Revenue in fiscal year 2017 fell 9% to US$7.3872 billion. , revenue in fiscal 2018 continued to fall by 0.17% to US$7.375 billion.
Image source: Victoria’s Secret official Weibo
On November 21 last year, Victoria’s Secret parent company L Brands released its third quarter financial report. Data show that during the reporting period, L Brands’ net loss expanded from US$2.8 million in the same period last year to US$252 million; net sales fell 4% year-on-year to US$2.677 billion, and same-store sales fell 2% year-on-year. The performance of L Brands’ main brand Victoria’s Secret also continued to deteriorate. Sales of the Victoria’s Secret brand were US$1.412 billion, compared with US$1.529 billion in the same period last year. Comparable sales fell 2%. This is the sixth quarter of sales decline for the Victoria’s Secret brand. In addition, last November, Stuart Burgdoerfer, CFO (chief financial officer) of L Brands, the parent company of Victoria’s Secret, confirmed in a conference call that this year’s Victoria’s Secret show would be canceled. “We believe that it is very important to improve Victoria’s Secret’s marketing methods.”
Affected by the epidemic again this year, Victoria’s Secret, which once created the “sexy myth”, has been experiencing a decline in performance. Some media have revealed that the original plan to sell to private equity fund Sycamore Partners has also come to an end. end.
The first quarter financial report released by L Brands (LB), the parent company of Victoria’s Secret, on May 20 showed that as of the first fiscal quarter, the sales of L Brands, the parent company of Victoria’s Secret, were year-on-year. It fell 37% to US$1.654 billion, with a net loss of US$297 million. Among them, Victoria’s Secret brand sales fell 46% to $821 million, and Bath & Body Works brand sales fell 18% to $712 million. This is the third consecutive quarter of losses for the group and the fourth consecutive quarter of sales decline. At the same time, L Brands (LB), the parent company of Victoria’s Secret, announced in its financial report that it will permanently close 250 stores in North America.
On May 21, Victoria’s Secret interim CEO Stuart Bergelfer said: “We expect that in addition to the 250 stores planned to close this year, there will be a considerable number of stores closed. Stores are closed, which means there will be more in 2021 and probably more in 2022.” He declined to give specific numbers for those years.
As of the close of trading on June 9, the share price of L brands, the parent company of Victoria’s Secret, rose 3.37% to close at US$19.31 per share, with a market value of US$5.36 billion.
Is China’s Victoria’s Secret a life-saving straw?
Many Chinese people are interested in Victoria’s Secret.At the same time, I also stopped at the “Victoria’s Secret Show” I once watched, as well as the “rising success” of Victoria’s Secret models Xi Mengyao, Liu Wen and others in the entertainment industry. In fact, Victoria’s Secret stores have been in China for many years.
Netizens are hotly discussing: Will there be no more Victoria’s Secret shows to watch in the future?
As soon as the news came out that Victoria’s Secret UK was about to go bankrupt and liquidated, it sparked heated discussions among netizens. Many netizens said: Will they no longer be able to see Victoria’s Secret shows in the future?
Victoria’s Secret, which is in trouble, attaches great importance to the consumption potential of the Chinese market. On April 20 and April 24, Victoria’s Secret officially announced that Zhou Dongyu would become its brand spokesperson for Greater China, and Yang Mi would be its spokesperson for Asia.
L Brands’ business is mainly divided into three parts, Victoria’s Secret domestic, Bath & Body Works domestic, Victoria’s Secret and Bath & Body Works overseas.
Among them, Victoria’s Secret’s domestic business is the company’s sales of women’s underwear, personal care products, and beauty products under the two brand names of Victoria’s Secret and PINK in the United States and Canada. In 2019, the business had net sales of US$6.805 billion and an operating loss of US$616 million.
Bath & Body Works domestic business is L Brands’s sales of skin care products, household fragrance products, soaps, cleaning products in the United States and Canada under a series of brand names such as Bath & Body Works and White Barn. agents and other products. In 2019, the net sales of this business were US$5.17 billion and operating profit was US$1.191 billion.
The overseas business of Victoria’s Secret and Bath & Body Works consists of direct-operated stores and franchised stores in China, the United Kingdom, and Ireland. In 2019, the business had sales of US$600 million and an operating loss of US$236 million.
It is reported that as of January 2020, there are 23 Victoria’s Secret women’s clothing stores and 41 Victoria’s Secret beauty stores in Greater China (including mainland China and Hong Kong, China).
After Victoria’s Secret UK was “recycled” on June 5, 2020, Victoria’s Secret CEO Stewart Bergdover said in a statement, Stores in the rest of the world are not affected.
It is understood that as of now, all 25 Victoria’s Secret stores in the UK are closed and only maintain operations through online e-commerce. At the same time, other brands including US department store operators J.C. Penney and Neiman Marcus are already facing bankruptcy, and the impact of the epidemic has been quite severe.
On June 9, CBD Jun asked the relevant person in charge of Guangzhou Taikoo Hui that Victoria’s Secret Guangzhou Taikoo Hui store is still open for business normally. Then Mr. CBD called the Tianhe City store, and the other party said that the store was still operating normally. If he needed further information, he needed to contact the headquarters. </p
