Next is near seeing off competitors from Marks & Spencer (M&S) and a number of different rivals to safe management of the British operations of Victoria’s Secret, the world’s largest lingerie brand.
Sky News can reveal that Next has been chosen as the popular UK franchise associate for Victoria’s Secret by directors at Deloitte, who had been known as in final month.
Sources stated that a top level view deal had been agreed however that the ultimate form of its future retail portfolio was dependent upon Victoria’s Secret UK’s landlords agreeing to restructure its lease phrases to replicate altering market circumstances within the wake of the coronavirus pandemic.
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Next is known to have secured an exclusivity settlement till the tip of September to finalise a deal.
The insolvency solely impacts the UK operations, and has no affect on Victoria’s Secret’s presence within the US or different markets, the place it’s owned by mum or dad firm L Brands.
Dozens of events are stated to have approached Deloitte a couple of deal in current weeks, with M&S additionally understood to have been critical a couple of franchise association.
One retail trade supply stated Victoria’s Secret was more likely to wish to retain a big bodily retail presence, together with its flagship London retailer on Bond Street, though it was doable that a few of its 25 shops can be closed completely.
By partnering with Next, the lingerie brand would achieve entry to a digital and supply functionality that’s regarded by analysts as probably the most subtle in UK retailing.
It would additionally give Victoria’s Secret a chance to associate with Next’s property crew to develop its UK presence by way of new standalone shops and concession preparations.
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One supply stated it could additionally permit the brand to capitalise on Next’s insights into British customers’ behaviour throughout a interval of sharp adjustments in consumption habits.
For Next, a tie-up would add one of many world’s greatest-identified lingerie retail manufacturers to a group of style labels which incorporates Abercrombie & Fitch, Boss and Under Armour.
According to analysts, it could additionally allow Next to draw youthful shoppers who’re drawn to Victoria’s Secret’s PINK underwear and attire brand.
The administration of Victoria’s Secret was among the many UK’s most notable insolvencies because the outbreak of COVID-19.
The pandemic has accelerated a structural shift throughout the trade, with clothes retailers corresponding to Cath Kidston, Debenhams, Laura Ashley and Monsoon Accessorize amongst these to fall into administration since March.
Some have emerged to renew buying and selling, however with drastically diminished bodily footprints.
Vast numbers of chains refusing to pay their hire payments in June for the third quarter, with footfall and gross sales at a fraction of the same old ranges following the lockdown.
At the time of Deloitte’s appointment as administrator, Rob Harding, a associate on the agency, stated: “This is one more blow to the UK excessive avenue and an extra instance of the affect the COVID-19 pandemic is having on the complete retail trade.
“The impact of the lockdowns, mixed with broader challenges dealing with bricks and mortar retailers, has resulted in a funding requirement for this enterprise, leading to in the present day’s administration.”
Despite its profile, Victoria’s Secret has struggled financially within the UK, making an working lack of £170m within the 12 months to February 20.
Victoria’s Secret’s mum or dad firm, L Brands, had itself been in discussions about being taken over by Sycamore Partners, a non-public fairness agency, earlier than the talks had been deserted in May.
Sky News revealed this week that Sycamore was one of many events which has expressed an curiosity in investing in Clarks, the household-owned shoe retailer.
Next couldn’t be reached for touch upon Wednesday, whereas Deloitte declined to remark and a spokesman for Victoria’s Secret stated: “We proceed to work carefully with Deloitte to evaluate a spread of doable outcomes.”