The fashion brand Victoria’s Secret’s UK arm has been sent into administration which has put more than 800 jobs at possible elimination.
All of the 25 stores of the company in the UK have been shut since the beginning of the lockdown because of the novel coronavirus outbreak in March. The chain is known for its fashion shows.
No immediate redundancies will happen at the UK arm of the company as a new buyer for the chain will be sought, said administrator Deloitte. It was “yet another blow to the UK High Street” amid the Covid-19 pandemic, said Rob Harding of Deloitte.
However, even before the outbreak of the coronavirus pandemic, the fashion was severely hit by changes consumer tastes and weakened spending. According to the most recent filings available, the UK arm of the chain made an operating loss of £170m in the year to February 2019.
The company was forced to cancel its annual fashion show last year as it pinned the blame on poor television ratings. Launched in 1995, the fashion show of the company was once considered to be a major pop culture event as it attracted millions of viewers every year to watch its so-called “angels”.
The show however attracted it lowest ever ratings in 2018 over criticisms of it being sexist, outdated and lacked diversity. At the time, the parent company of the brand, L Brands, had said that it was important to “evolve” its marketing strategy.
Before appointing administrators, 785 workers of the company the UK had already been furloughed. The administration was described as “light touch” by Deloitte which essentially meant that the management of the company could still continue to run the business.
The administrator now has the task of trying to find a new buyer for the company or to re-negotiate the rents that the company pays for its High Street stores with the aim of enhancing the financial situation of the firm.
While all of the stores of the firm I the UK will be shut for now, none of them will be officially closed as of now. The online business of the company is also excluded from the administration process and it will continue to do business.
This was a “further example of the impact the Covid-19 pandemic is having on the entire retail industry,” Harding added. “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.”
Several other High Street brands have been struggling in recent weeks due to lockdown measures introduced in March to stop the spread of the virus.
Both fashion firms Cath Kidston and Laura Ashley, for example, have called in administrators since the beginning of the coronavirus outbreak.
However analysts say that brands such as Savage X Fenty, the lingerie line by singer, actress and businesswoman Rihanna, have eclipsed Victoria’s Secret in recent years.
“If the UK arm of Victoria’s Secret is to be saved, it needs a new start and a major overhaul of its brand and marketing strategy. It needs to be brought up to date to reflect the values of gender equality, sustainability, and diversity that appeal to today’s shoppers and compete with the brands that have overtaken it,” said Qing Wang, professor of marketing at Warwick Business School.
(Adapted from BBC.com)