Lingerie giant Victoria’s Secret has announced the completion of a joint venture with Regina Miracle International in regards to its company-owned business in China.
The agreement will see Regina Miracle own 49 percent of the lingerie company’s China-based operations, including its Victoria’s Secret stores and online business. Victoria’s Secret will own 51 percent.
In a release, Victoria’s Secret said it had received 45 million dollars in cash from Regina Miracle “as consideration for its investment in the joint venture”.
On the agreement, Martin Waters, CEO of Victoria’s Secret, said he was “confident this partnership will accelerate” the company’s growth opportunity in China, “by leveraging Regina Miracle’s merchandising and market knowledge” as well as establishing a closer proximity to its growing market base in the region.
Waters added: “This collaboration was an important step for Victoria’s Secret and completes the reformatting of our international business to be exclusively a franchise or partner-based model, and supports both online and store growth at a fast pace and more profitably. We believe our business is underpenetrated internationally and double-digit sales and profit growth is a realistic opportunity, both in the near-term and over a long-term time horizon.”
The company noted that, based on its financial review of its China business and terms of the agreement, it does not anticipate the transaction to have a material impact on previously communicated sales and income.