United Kingdom: The British branch of Victoria's Secret goes bankrupt

Updated

The sign is placed under the British bankruptcy regime. The brand has 25 stores in the UK and 800 employees. Its activity had come to a halt due to the pandemic.

The British branch of the Victoria's Secret lingerie brand has declared bankruptcy, which threatens 800 jobs, after suffering a halt in its activity due to the pandemic. The brand has filed for British bankruptcy and the firm Deloitte has been appointed administrator, the latter announced in a press release on Friday.

Online activities spared

The brand has 25 stores in the United Kingdom and 800 employees, 785 of whom benefit from the partial unemployment scheme put in place by the government. This bankruptcy does not concern online activities in the United Kingdom since they are not owned by the British branch itself.

In order to revive the brand in the country, Deloitte is considering either renegotiating the store leases with their owners, and/or finding a buyer.

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“New blow”

"This is another blow to businesses in the UK and the latest example of the impact of the Covid-19 pandemic on the retail sector," said Rob Harding of Deloitte.

“The effect of the confinements, combined with the broader challenges facing physical businesses, created a need for financing for this company” and therefore led to its bankruptcy, he explains.

Continuation of activities

However, the company has opted for a loose bankruptcy regime, which allows it to continue its activities while not being under pressure from its creditors.

The pandemic has already precipitated the bankruptcy of the British clothing and homeware chain Laura Ashley and the department store chain Debenhams.

Parent company not spared

The American parent company, Victoria's Secret, is not spared from the difficulties, after being very popular in the early 2000s.

Faced with financial problems, in May it announced the closure of 250 stores in North America, and warned that more could follow in the next two years.

And because of the pandemic, its owner, the American company L Brands, had previously canceled its sale to the Sycamore Partners fund, which had agreed to pay 525 million dollars in order to take control (55% of the capital).