Victoria’s Secret UK has recently filed for administration, following in the footsteps of other retailers in adopting a ‘light touch’ approach during the COVID-19 pandemic. The administration process will be handled by Deloitte. This move comes after the well-publicized struggles of Victoria’s Secret’s US operations, which is owned by L Brands, and the administration filings by other UK store chains. While the physical stores of Victoria’s Secret UK have been closed since the lockdown began in Britain on March 23, its online store, which is not owned by the UK arm, is still operational.

As of now, Victoria’s Secret UK has 800 employees, with most of them on furlough, and operates 25 sites. There have been no announcements about job redundancies at this time. Deloitte is currently working on restructuring lease terms across the company’s portfolio or finding a buyer for its assets. Rob Harding, the Joint Administrator, expressed his concern about the impact of the COVID-19 pandemic on the entire retail industry and stated that this is another blow to the UK high street.

The challenges faced by Victoria’s Secret are a result of the brand’s decline in recent years, after once being a powerhouse in the L Brands portfolio. It has been seen as outdated compared to newer labels that have gained popularity. Although L Brands agreed earlier this year to sell the brand to Sycamore Partners, a private equity group based in New York, the deal fell through just this month. This likely prompted a reassessment of the company’s international operations, leading to the appointment of Deloitte for the ‘light touch’ administration.

Given the current market conditions, analysts believe that Victoria’s Secret UK’s decision to continue operating online is a sensible move. The decline in spending projected for the UK clothing and footwear market this year makes the online channel a lifeline for many retailers. However, the administration filing may pose challenges for landlords, as struggling retailers like Victoria’s Secret may seek rental deals or leave vacant spaces if they are unable to recover.

Victoria’s Secret UK, initially launched in 2012 as a desirable yet expensive underwear brand, has lost its appeal among shoppers due to a lack of inclusivity. The cancellation of its famous catwalk show last year further diminished its appeal, leading customers to explore other options.

Useful links:
Retail Gazette: Victoria’s Secret UK files for administration amid COVID-19
BBC News: Victoria’s Secret UK goes into administration