UK retail giants Next and Marks & Spencer are both interested in taking on the British operations of Victoria's Secret, the international lingerie brand owned by L Brands, according to a report.
They’re said to be among several parties looking at becoming the new UK franchise partner for the brand’s parent company with a news story saying that at least one other unknown party is also looking at a deal. Those parties will negotiate with Deloitte, which was called in as an administrator to the British arm of the chain earlier this month.
Sky News reported the story as the chain reopens around a third of its 25 UK shops on Friday.
It's perfectly feasible that both Next and M&S would be looking at the operation as both are already major players in the intimates market in Britain. Next is also currently expanding its wider business by linking up with a large number of brands in multiple categories and is also growing by opening standalone in expanding categories, such as beauty.
M&S meanwhile is forging stronger links with external brands as well, after most of its history was dominated by its own label. It said when it released its recent annual results that it's looking closely at “complimentary guest brands to broaden the appeal and increase online growth”.
As it seeks growth opportunities, it would make sense to take on a major name in the intimates sector in which M&S already has a dominant position in the UK. It currently has a 27% share of the overall lingerie market and 36% of the market for bras, although this means any deal it might strike could attract the interest of the competition authorities.
Regardless of who eventually wins control of the chain, it's likely that they'll want to seek better deals from landlords in terms of rent and service charges, although Sky News reported that those shops reopening are already doing so with reduced rents.