What does selling a 49% stake in its Chinese business mean for Victoria’s Secret?

Victoria’s Secret defined femininity for millions of women before, but now it’s struggling to keep afloat in China. Throughout the past few years, the brand has been steadily losing its grip on its Chinese consumers due to its belief in body perfection, oppression, and sexualised advertising. More and more female consumers are now focusing on what they want instead of what men want.

After redefining its signature brand of “sexy” in 2021 by launching the VS Collective to convey empowerment and inclusivity within the initiative, the brand has been ramping up its revival efforts.

On 6 April, Victoria’s Secret announced that the company will sell a 49% stake in its Chinese business to the Chinese lingerie maker Regina Miracle International. The two companies have formed a joint venture to operate all Victoria’s Secret stores and related e-commerce business in China, aiming to grow through product development, distribution, and marketing.

Regina Miracle International was founded in Hong Kong in 1998. The core business of the company focuses on lingerie, sports bras and clothing, etc. In addition to Victoria’s Secret, the cooperative brands also include Calvin Klein, Adidas and Under Armour.

Under the terms of the agreement, Victoria’s Secret owns 51% of the joint venture with $45 million in cash from Regina Miracle International, and the Chinese intimate apparel manufacturer owns the remaining 49%.

Victoria’s Secret CEO, Martin Waters said that the cooperation with Regina Miracle International will accelerate the development of Victoria’s Secret in China, and this collaboration will transform the international business of Victoria’s Secret into an exclusive franchise or partnership model. Mr Waters is confident in the partnership, “We believe the international business has the opportunity to achieve double-digit sales and profit growth, both in the short and long term.

Hong Youyi, Chairman, Chief Executive Officer and Executive Director of Regina Miracle International, said that both parties will leverage complementary strengths to enable the business to meet the complex needs of Chinese consumers and seize growth opportunities in China.

Whether the joint venture is going to help Victoria’s Secret grow further in China is worth watching.


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