Victoria’s Secret has sold a 49-per-cent stake in its China business to Hong Kong-based lingerie manufacturer Regina Miracle International for US$45 million.
The two companies will form a joint venture to co-operate in Mainland China, overseeing the design, development, manufacture, 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 YY Hung, chairman, CEO and executive director of Regina Miracle.
The deal is expected to receive regulatory approval during the first quarter of this year and should provide a boost to Victoria’s Secret’s presence in the world’s most populous country, where it has struggled to gain momentum to date. Sales have been disappointing in the past few years as the brand’s image was out of touch with customer preferences.
Regina Miracle currently 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.
“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 Martin Waters, CEO of Victoria’s Secret.
“This JV with Regina Miracle in China completes a multi-year repositioning of the International business of the company and we believe establishes a platform for accelerated sales and earnings growth in the market over the next several years.”
Regina has been a production partner of Victoria’s Secret for some 20 years making it a respected and ‘known’ partner with which to partner, according to Jane Hali, CEO at Jane Hali & Associates.
“This seems to be a wise solution to distribution in China,” she wrote in an email to Retail Dive. “Companies are successful when they are consumer-centric and know their customers wants and needs.”