Victoria’s Secret to Buy Lingerie Brand Adore Me for $400 Million
Retailer to acquire online rival that has focused on inclusive marketing
Victoria’s Secret VSCO -2.54% & Co. is buying online lingerie seller AdoreMe Inc., adding a brand known for inclusive sizing and body positivity as the retailer tries to move away from a legacy built largely on sex appeal.
Victoria’s Secret is paying $400 million in cash for Adore Me, a direct-to-consumer business that started about a decade ago. The online lingerie seller is on track for about $240 million in revenue this year, according to Victoria’s Secret. It comes after Victoria’s Secret itself has shifted its marketing, hiring more diverse models, and discussed plans to add new brands to its mix.
The New York-based startup has more than 1.2 million customers, mostly bargain seekers, who purchase its products online through monthly subscriptions and one-time buys. Customers can also try on Adore Me’s apparel at home before purchasing.
Chief Executive Martin Waters said Victoria’s Secret plans to use those online shopping features with its other brands. “They’re significantly further advanced in the way that they use technology at the forefront of everything that they do,” Mr. Waters said. He expects the deal will also bring in more cost-conscious consumers.
Victoria’s Secret plans to finance the deal with cash on hand. The deal includes further cash consideration, a portion of which is fixed and the other is based on performance goals over a two-year period. The deal is expected to close by the end of January, pending regulatory approval.
Adore Me founder and Chief Executive Morgan Hermand-Waiche will continue to lead the business following the acquisition, Victoria’s Secret said. Adore Me has 560 employees, all of which will continue to work for the brand, Mr. Waters said.
Last year, Victoria’s Secret logged $6.79 billion in sales, up 25% from the year prior. The retailer expects full-year sales to decline as consumers face persistent inflation, among other macroeconomic challenges.
Reynoldsburg, Ohio-based Victoria’s Secret recently outlined a long-term plan to grow market share and be more inclusive to its customer base. The retailer has attempted to change its messaging since splitting off from L Brands last year.
“We’re on our own journey to become significantly more diverse and more inclusive in the way that we go to market, and I feel good about where we are on that journey,” Mr. Waters said.
Victoria’s Secret became a stand-alone public company last year after a failed deal to sell a controlling stake to a private-equity firm. Mr. Waters became CEO of the lingerie seller in November 2020 and sought to lead its turnaround.
The company has since swapped out its Victoria’s Secret Angels for a group called the VS Collective, which features famous women such as soccer star Megan Rapinoe and Indian actress Priyanka Chopra Jonas. It has also added in its stores images of natural-looking women and mannequins with different body types. Maternity apparel and shapewear have hit the shelves, along with a perfume meant to enhance a person’s natural smell.