Victoria’s Secret to sell 49% stake in its China business for $45 million

Victoria’s Secret last Tuesday (25 January) announced that it will sell a 49% stake in its China business to Hong Kong-based lingerie maker Regina Miracle International for $45 million. 

As reported by Inside Retail, Regina Miracle has an R&D and production base in China and a major production base in Vietnam, with a combined workforce of more than 46,000.

The deal also forms the joint venture between the two companies, which they said builds on their two decade-long relationship. In a statement, Victoria's Secret CEO Martin Waters called Regina Miracle “a valued merchandise supplier partner for more than twenty years".

“We expect the partnership will positively impact the speed and agility of the business to benefit consumers and provide us with a platform for a strong future in this important market,” said Waters.

The joint venture will co-operate in Mainland China, overseeing the design, development, manufacturing, marketing and sale of lingerie, along with the marketing and sale of personal care and beauty products in China. 

“We are confident that our highly complementary strengths will perfectly position this partnership in capturing the growth opportunities and creating value for consumers in China,” said Regina Miracle Chairman, CEO and Executive Director YY Hung.

This deal signifies Victoria’s Secret’s strategy in maintaining control of its business in China, but letting a local and known player to run it. According to Retail Dive, this can be considered as a “wise solution to distribution in China”, given that “Victoria's Secret's international growth has been disappointing for the last five to seven years”. 

Waters said the joint venture finishes up a multi-year repositioning of the brand's international operations. “We expect the partnership will positively impact the speed and agility of the business to benefit consumers and provide us with a platform for a strong future in this important market," he stated.