What happened to cause the decision
The brand, which made an operating loss of £170 million last year, will continue to be run by current management on a day-to-day basis while administrators look to find either a buyer for the whole company or the individual assets.
As well as bringing various legal protections against creditors and landlords, the administration period will give practitioners valuable time to pull together a credible rescue plan if possible.
One element would be to negotiate rent reductions or holidays with landlords which would cut outgoings immediately.
Over 800 employees work for the company although the vast majority of them had been furloughed since March when the stores closed in line with government regulations.
The business continues to operate its online operations and it’s just the UK stores that are affected.
In the 1990s and early 2000s, Victoria’s Secret was a popular and cultural phenomenon. The annual fashion show was launched in 1995 featuring supermodels wearing outrageous costumes and creations. It was screened live on international TV to massive initial audiences but these ultimately dwindled and the 2018 edition saw the lowest figures ever.
In fashion circles it was widely acknowledged that the brand was already struggling to hold its own against new disrupters aimed at millennials and their changing tastes and celebrity-launched ranges by stars such as Rhianna with her Savage X Fenty line which is aimed at specific body types.
Qing Wang, professor of marketing at Warwick Business School said: “If Victoria’s Secret is to be saved, it needs a new start and a major overhaul of its brand and marketing strategy.
“It needs to be brought up to date to reflect the values of gender equality, sustainability and diversity that appeals to today’s shoppers and compete with the brands that have overtaken it.
“It has not kept pace with the strong values of millennials and post-millennials, who should now be the company’s target customers,” she added.
Stripping the business down to save it
Anybody who grew up in the 90s and 2000s will be shocked that one of the key high street and cultural touchstones is on the verge of joining Woolworths, Blockbuster and Littlewoods.
But the story of these names tells you that name is no guarantee of future success if you move away from the market, or the customer and the market moves away from you.
Any business needs to anticipate and innovate and if it doesn’t or can’t then they will have to decide what direction they want to go in themselves.
The trouble is – there are so many possible paths to choose from. How do you know which is the right one for you?
Get in touch with one of our expert advisors today and they will set up a free initial, virtual consultation with you to discuss where your business is at now and ideally where you’d like it to be.
If there’s a way to reconfigure and reboot your business and push through your current malaise then they’ll tell you.
If you think you’re at the end of the road and before you can move onto your next chapter then they can help you with an orderly closing of your current business too.
Whatever your ambition – it’s no secret that the best way of reaching it is by talking to a BusinessRescueExpert.