Victoria’s Secret closes flagship store in Hong Kong's Causeway Bay
Victoria’s Secret has closed its flagship store in Causeway Bay, as tourism plunges in Hong Kong and the company faces massive financial losses due to the Covid-19 pandemic.
The luxury lingerie retailer simply posted a notice outside of the store on Wednesday that read, “We regret to inform you that we have closed the Victoria’s Secret Flagship Store at Causeway Bay in Hong Kong. You will be available to shop online on our international website.”
The five-story, 50,000-square-foot flagship store, which the company opened in July 2018, is in a prime location and is the company’s last store in the region. Victoria’s Secret will be breaking a 10-year contract about seven-and-half years premature, though it is not yet clear whether it will face an early lease termination penalty.
The decline of tourism in Hong Kong has also lead other brands to close shop in the area including U.S. fashion brand J. Crew, and Greek jeweller, Folli Folli, while Prada equally closed its flagship store on Russell Street.
Victoria’s Secret financial pains however, can be found across markets and are not specific to Hong Kong.
In fact, parent company L Brands had agreed to sell a controlling stake in its Victoria's Secret unit to investment firm Sycamore Partners earlier this year, but the buyout firm walked away from the $525 million deal in April, after the lingerie brand shut down stores and furloughed staff in response to the Covid-19 outbreak.
Last month, L Brands reported a 37.1 percent decline in revenues for the first quarter ended May 2, 2020. The largest decline was seen at the Victoria’s Secret lingerie brand, where sales fell from $1.5 billion to $821.5 million.
It also announced several measures, to ensure liquidity in light of the ongoing Covid-19 pandemic including suspending rent payments and reducing its spring inventory receipts by approximately 45 percent at Victoria’s Secret, among other steps.
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