Next close to winning race for Victoria's Secret UK - report

By

Sandra Halliday

Published
Jul 15, 2020

Fashion retail giant Next look set to emerge the winner as a number of rivals compete to run the failed British arm of lingerie firm Victoria’s Secret.

It emerged last month that the company was interested in the business with retail peer M&S also reported to be eyeing the operation.

But Sky News reported late on Wednesday that the administrator Deloitte, which has controlled the Victoria’s Secret British operation since it collapsed into administration in early June, has chosen Next as the preferred UK franchise partner. 

It said an outline deal has been agreed, although it’s unclear how large the retail portfolio will be as the future viability of individual stores will depend on the outcome of talks with landlords for more affordable rents.

It was also reported that Next has exclusivity until late September to finalise a deal.

The Victoria’s Secret brand is ultimately owned by US parent L Brands, which continues to operate it in other countries. But the label has been a drain on the parent firm’s resources in recent periods as a fall from grace has seen it struggling in a way that would once have been unthinkable for the star brand.

Yet it’s still the world’s largest and best known lingerie label and Sky said that “dozens” of parties had expressed an interest in the UK ops, including M&S, which is itself the biggest intimates retailer in Britain.

Victoria’s Secret currently has 25 UK stores, including a Bond Street flagship in London and prime positions in key malls such as Bluewater.

If it comes under Next’s control, it would join a company for which sales through physical shops and through online channels are roughly equal, but with online growing as physical retail shrinks. 

Next is acknowledged to be one of the best run fashion retail businesses in the UK and as well as its digital expertise, it also has a strong track record of selling third-party brands. 

Its move into selling brands other than its own label has helped its business grow in recent years and the firm is also seeking growth through category expansion. It’s targeting beauty in a big way through the launch of a new standalone chain and also took control of the Fabled by Marie Claire beauty business early last summer.

It also has experience of handling complete category operations for other brands and later last summer was named as the new childrenswear licensee for Ted Baker.