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Victoria’s Secret was slow to recognize changes in the intimates market toward inclusivity and digital commerce, leaving an opening for direct-to-consumer brands that found a fit with how women wanted to shop. Now, it is bringing one of those digitally native brands into its fold.
The news: VS&Co., which is the parent of Victoria’s Secret, has an agreement in place to acquire Adore Me, a digitally native intimates brand and B Corp. founded in 2010.
By the numbers:
- The price: VS&Co will pay $400 million upfront in cash for Adore Me. The deal includes additional cash considerations, a portion of which is fixed and a portion of which is based on performance goals over two years.
- Customers: Adore Me currently has more than 1.2 million active customers.
- Revenue: Adore me is on track to reach about $240 million in revenue in 2022, according to the Wall Street Journal.
In a statement, Victoria’s Secret CEO Martin Waters said Adore Me will help the brand “move to the future much faster.” Here are three areas where the acquisition is additive for Victoria’s Secret.
Victoria’s Secret has been in the midst of a turnaround effort, as it seeks to present a more inclusive brand image and product line after falling out of step with the consumer. This includes offering a wider range of sizes and styles, and shifting marketing toward women, as opposed to the angels and looks that were geared more toward men. Some of the steps have included operational moves like a separation from former parent company L Brands, while others have been more brand-centered such as bringing on a group of activist brand ambassadors and a Mother’s Day campaign with a pregnant model, CNBC reported last year.
Adore Me has been built for where Victoria’s Secret wants to head from the start. The brand has a range of sizes – XS-4XL and cup sizes A-I. It reflects diversity throughout its brand, and presents itself as being there for women at any point in their life. As a B Corp., it also has sustainability woven into its operations. Even as Victoria's Secret overhauls its offerings, Adore Me brings market share that the company is trying to gain.
For a brand that has long been associated with the mall, this acquisition could be just as much about modernizing the shopper experience at Victoria’s Secret as it is about the product line. In the announcement about the acquisition, Victoria’s Secret put a big emphasis on the ecommerce-centered innovation that Adore Me brings, and indicated that the brand's tech can be applied to brands across the company.
“Adore Me is a technology-led, digital-first innovator in the intimates category that will help us bring differentiated experiences to Victoria’s Secret and PINK customers,” said Waters, in the statement. “This acquisition will be a significant accelerant as we pivot toward growth and modernize the foundation of our company with an entrepreneurial mindset that puts technology at the forefront of everything we do.”
The press release goes on to state that Adore Me is “powered by a sophisticated proprietary technology platform with highly differentiated customer experiences.”
One of those innovations is home try-on. Adore Me offers customers a subscription service that ships a monthly box with products that are available to try before buying, bringing the experience of shopping for lingerie to the home. Customers pay only for what they decide to keep.
Victoria’s Secret said that home try-on “generates strong retention among its customers with a personalized product experience and has achieved scale by leveraging a complex combination of proprietary logistics, algorithms, and operational assets.”
Is a Victoria's Secret box next?
Adore Me also has a customer base that is complementary to Victoria’s Secret, according to the brand. Adore Me represents the value portion of the intimates market. This means Adore Me can be a “growth vehicle” for Victoria’s Secret.
House of (digital) brands
With the addition of Adore Me, VS&Co. now has a number of labels under its umbrella as it seeks growth i digital channels. There is Victoria’s Secret and Pink, which launched a dedicated Amazon store for beauty products in May. Earlier this year, the parent company acquired a minority stake in Frankie’s Bikinis and For Love & Lemons. It launched the tween-focused brand Happy Nation, and inclusive and added fashion-focused lingerie brand Elomi to its digital marketplace platform, called VS&Co. Lab.
Now, Adore Me will continue to operate as its own business brand under CEO Morgan Hermand-Waiche with 560 employees, WSJ reports.
It’s clear the modernization of Victoria’s Secret will not go through the flagship brand alone. Adore Me has long pushed intimates forward. Now it will be in a position to help one of the category's legacy companies catch up.
Trending in Brand News
Labor disputes on the West Coast could cause further disruption heading into peak season.
When the first half of 2023 is complete, imports are expected to dip 22% below last year.
That’s according to new data from the Global Port Tracker, which is compiled monthly by the National Retail Federation and Hackett Associates.
The decline has been building over the entire year, as imports dipped in the winter. With the spring, volume started to rebound. In April, the major ports handled 1.78 million Twenty-Foot Equivalent Units. That was an increase of 9.6% from March. Still it was a decline of 21.3% year over year – reflecting the record cargo hauled in over the spike in consumer demand of 2021 and the inventory glut 2022.
In 2023, consumer spending is remaining resilient with in a strong job market, despite the collision of inflation and interest rates. The economy remains different from pre-pandemic days, but shipping volumes are beginning to once again resemble the time before COVID-19.
“Economists and shipping lines increasingly wonder why the decline in container import demand is so much at odds with continuous growth in consumer demand,” said Hackett Associates Founder Ben Hackett, in a statement. “Import container shipments have returned the pre-pandemic levels seen in 2019 and appear likely to stay there for a while.”
Retailers and logistics professionals alike are looking to the second half of the year for a potential upswing. Peak shipping season occurs in the summer, which is in preparation for peak shopping season over the holidays.
Yet disruption could occur on the West Coast if labor issues can’t be settled. This week, ports from Los Angeles to Seattle reported closures and slowdowns as ongoing union disputes boil over, CNBC reported. NRF called on the Biden administration to intervene.
“Cargo volume is lower than last year but retailers are entering the busiest shipping season of the year bringing in holiday merchandise. The last thing retailers and other shippers need is ongoing disruption at the ports,” aid NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “If labor and management can’t reach agreement and operate smoothly and efficiently, retailers will have no choice but to continue to take their cargo to East Coast and Gulf Coast gateways. We continue to urge the administration to step in and help the parties reach an agreement and end the disruptions so operations can return to normal. We’ve had enough unavoidable supply chain issues the past two years. This is not the time for one that can be avoided.”