25th June 2020 – (Hong Kong) Victoria’s Secret flagship store in Causeway Bay suddenly announced the dismissal of all employees yesterday evening. A notice was posted outside the main entrance to announce the sudden closure of their flagship store and all their products are still available online. However, there were still many lingerie and clothing in the store that have not been removed.
Victoria’s Secret rented the 4-storey building (50,000sqf) at a halved price of HK$7 million per month 2 years ago since September 2017. The lease was signed for 10 years and Victoria’s Secret might have to pay for the remaining rent arrears amounting to HK$600 million for the remaining 7 and half years as a result of the premature termination of the tenancy agreement.
The Victoria’s Secret UK business has 25 stores, now all at risk of closure. A staff of 785 employees have been furloughed during the process. “This is yet another blow to the UK high street and a further example of the impact the Covid-19 pandemic is having on the entire retail industry,” said Deloitte joint administrator Rob Harding in a statement.
In early June, we reported that Victoria’s Secret UK business has filed for bankruptcy. It has been placed in administration and it is not just a victim of the COVID-19 crisis, says one analyst. Echoing concerns expressed in the brand’s US home market, Sofie Willmott, lead retail analyst at GlobalData, said Victoria’s Secret has lost its appeal to its target demographic.
In the US, L Brands, parent company of Victoria’s Secret, plans to close about 250 stores to right-size the business. A large question mark hangs over its flagship stores internationally, including in Asia and a strategic review has been launched into the brand’s presence in China.