On January 25, 2022, Victoria's Secret announced a partnership with Regina Miracle International Ltd on its existing business in China. The two companies set up a joint venture to jointly operate physical stores and online sales businesses in China. This not only means that the long-term cooperation between the two sides has entered a new era, but also reflects the determination of both parties to increase the layout of the Chinese market.
Under the terms of the agreement, Victoria's Secret will own 51 percent of the joint venture and Virginie will own the remaining 49 percent. The agreement has been submitted to regulatory approval and is expected to be implemented in the first quarter of fiscal 2022. During this time, Virginie will pay $45 million in cash to Victoria's Secret as an initial investment in a joint investment.
Who is Virgin?
Virginie International (Holdings) Limited was established in Hong Kong in 1998 and first started its business in Shenzhen, China, mainly in the production of chest cups. Subsequently, the Group was listed on the Main Board of The Stock Exchange of Hong Kong Limited in 2015. In just a decade, Virginie has rapidly developed into the world's leading manufacturer of underwear and is a veritable industry leader.
Today, Virginie's main business includes underwear (such as bras, sports bras, underwear, body contouring, etc.), functional sports (such as clothing and footwear) and consumer electronics. The company currently has six factories in Vietnam, one in Shenzhen, and a new plant in Zhaoqing, Guangdong Province, which is expected to be operational by the end of 2023. Over the years, Virginie has established long-term cooperative relations with many global partners, and is an important product development partner and supplier of underwear and sports brands with a huge consumer base.
As a leading player in the industry, Virginie adopts an innovative design manufacturer (IDM) business model. Under this model, Virginie exerts its strengths in research and development and integrates innovative technologies, equipment and materials in many fields, continuously achieves breakthroughs in product process, structure and functional design, and creates innovative products that meet the needs of consumers, thereby promoting the development of the industry. Unlike ordinary foundries, Virginie has the ability to innovate, design and manufacture new products for the brand.
The new relationship of "old partners"
Victoria's Secret and Virginie have been working together for more than two decades, and Virgin's is one of the world's largest suppliers of victoria's secrets underwear and a close partner in Victoria's Secret from concept conception to product design and development to product delivery. After the official upgrade of the partnership, Victoria's Secret and Virginie will work together through the joint venture to jointly develop and invest in all aspects of products, manufacturing, distribution and marketing to jointly develop and develop their business in China.
Both sides regard China as an important market, and the cooperation between the two major brands will also provide a stronger security platform and have a profound impact on the rapid development and flexibility of China's business, which will ultimately benefit the brand's consumers. This cooperation also represents the end of the repositioning of Victoria's Secret's international business in recent years. With this cooperation platform, it will also be able to accelerate the sales and profit growth of the Victoria's Secret brand in the future.
Dialogue with women, Victoria's Secret continues to transform
In the past year, Victoria's Secret has continued to transform and reversed the direction of the brand's development under the guidance of the new brand concept of diversified beauty and doing its own. During this period, Victoria's Secret has launched a number of new cooperation projects to empower every woman, pay close attention to women's health in China, and carry out dialogue with women in a series of new initiatives.
Beginning in the first half of 2021, Victoria's Secret continued to speak out for women in its new partnership, The VS Collective. The VS Collective brings together outstanding women from all walks of life, including Eileen Gu Gu Ailing, who won the gold medal at the 2022 Beijing Winter Olympics. Gu Ailing has also been involved in the Victoria's Secret series, working with the brand to create revolutionary product lines and engaging content.
Victoria's Secret also co-sponsored the Victoria's Secret Global Women's Cancer Fund with Pelotononia, which funds innovative research projects and invests in the next generation of women scientists. During October Breast Cancer Prevention Month, Victoria's Secret partnered with stella McCartney, a renowned designer and breast cancer awareness advocate, to raise awareness of breast cancer risk and the importance of early detection. Victoria's Secret has also innovated the first Body by Victoria breast postoperative bra.
Victoria's Secret and Virginie reached an agreement to jointly lay out the Chinese market is the main purpose of this cooperation between the two sides. As an innovative design and manufacturer in China, Virginie has industry-leading innovation capabilities and market foresight, while Victoria's Secret has brand leadership, commercial retail and marketing expertise, which brings certain complementary advantages to this cooperation, thereby mobilizing insight and penetration in the Chinese market, and taking this opportunity to seize the brand's growth potential in the Chinese market.