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Next is preferred UK franchise partner for Victoria’s Secret

By Huw Hughes

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Report

Next has reportedly been selected as the preferred UK franchise partner for the UK arm of Victoria’s Secret.

The British retailer has agreed to an outline deal to take over the brand, according to Sky News. But the future of its retail estate reportedly depends on whether Victoria's Secret UK's landlords will agree to restructuring its lease terms to reflect challenging market conditions.

Dozens of other parties, including Marks & Spencer, were reportedly interested in taking control of the brand, though Next was ultimately chosen by administrators at Deloitte, who were called in last month.

It is understood that Next has an exclusivity agreement until the end of September to finalise a deal.

This insolvency only affects the UK operations of Victoria's Secret. Its other markets, including the US, are being operated as usual by parent company L Brands.

A retail industry source told Sky that Victoria's Secret will likely want to retain a significant physical retail presence, including its flagship store on London’s Bond Street, though some may have to close permanently. The brand currently has 25 outlets across the UK.

Each company in the proposed deal would have benefits to reap from the tie-up. Next would have control of one of the most well known lingerie brands in the world, while Victoria’s Secret would benefit from Next’s strategy which has outperformed a struggling sector and yielded impressive growth across both its physical and digital channels.

In May, it was revealed that Next was planning an ambitious expansion to become an online host for other brands, a project it had been quietly working on over the past year and that will allow it to run other fashion brands’ websites and back-end operations.

Photo credit: Brands resources

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