Victoria's Secret completes joint venture for China business
Victoria's Secret & Co said on Wednesday that it has completed the sale of a minority stake in its China business to Hong Kong-based lingerie maker Regina Miracle International Ltd for $45 million in cash.
As part of the agreement, first announced in January, the two have formed a joint venture to operate all Victoria’s Secret stores and the related online business in China. Under the terms, Victoria’s Secret now owns 51 percent of the joint venture and Regina Miracle owns the remaining 49 percent.
“I am confident this partnership will accelerate our growth opportunity in China by leveraging Regina Miracle’s merchandising and market knowledge, and closer proximity to a rapidly growing potential customer base,” said Martin Waters, Victoria’s Secret CEO.
“This collaboration was an important step for Victoria’s Secret and completes the reformatting of our international business to be exclusively a franchise or partner-based model, and supports both online and store growth at a faster pace and more profitably. We believe our business is underpenetrated internationally and double-digit sales and profit growth is a realistic opportunity, both in the near-term and over a long-term time horizon.”
Victoria's Secret became an independent, publicly traded company after separating from Bath & Body Works last year. It said that it does not anticipate the transaction to have a material impact on the previously communicated sales, operating income and earnings per share guidance for the first quarter of fiscal 2022.
“The successful closing of the joint venture agreement between Regina Miracle and Victoria’s Secret marks an important milestone in our long-standing partnership,” said YY Hung, chairman, CEO and executive director of Regina Miracle.
“Through the formation of this partnership, we are pairing Regina Miracle’s innovation capabilities and market foresights as an innovative design manufacturer with Victoria’s Secret’s undisputed innovation and brand leadership, retailing and marketing expertise. We are confident that by leveraging our highly complementary strengths, the business will be best positioned to cater to the sophisticated needs of the Chinese consumers and hence capture the growth opportunities in China.”
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