800 jobs at risk after Victoria’s Secret becomes latest retail casualty

Via Yahoo Finance

The UK arm of Victoria’s Secret has fallen into administration, putting more than 800 jobs at risk.

The lingerie retailer, which operates 25 stores in the UK, confirmed that it has called in administrators from Deloitte after being hammered by the coronavirus lockdown. 

The insolvency firm said it will conduct a “light touch” administration at the retailer, adding that there will be no immediate redundancies, as it tries to find a buyer for the chain.

Victoria’s Secret has 785 employees on furlough and all of its UK stores have been shut since lockdown began in March. 

Rob Harding, joint administrator at Deloitte, said: “This is yet another blow to the UK high street and a further example of the impact the Covid-19 pandemic is having on the entire retail industry. 

“The effect of the lockdowns, combined with broader challenges facing bricks and mortar retailers, has resulted in a funding requirement for this business, resulting in today’s administration.”

However, the lingerie chain, famous for its fashion shows, had been struggling long before pandemic hit the UK.

Changing consumer demand and falling sales pushed the UK arm to a £170m operating loss for the year to February 2019. 

Ming Xi, Grace Elizabeth, Cindy Bruna, Gigi Hadid, Kendall Jenner and Alexina Graham at the Victoria’s Secret show 94 in New York in November 2018

Victoria’s Secret scrapped its annual fashion show last year, blaming poor television ratings, but the event had drawn criticism in recent years for being sexist.

Questions were also raised over its owner Leslie Wexner’s ties to disgraced financier Jeffrey Epstein.

Last month, private equity firm Sycamore Brands pulled out of a $525m (£407m) deal to take a 55pc stake in Victoria’s Secret.

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Mr Harding said: “We will now work with the existing management team and broader stakeholders to assess all options available for the future of the business. As administrators we’d like to thank them and all of the employees for their support, at what we appreciate is a difficult time.”

The chain’s online business is not owned by Victoria’s Secret UK and will continue to operate.

The lingerie brand becomes the latest retailer to fall victim to the Covid-19 pandemic, joining other big high street names such as Debenhams, Cath Kidston and Laura Ashley.