The $400 million acquisition of Adore Me says a lot about about how the famed and controversial lingerie giant is trying to reposition its business.
The infamous lingerie company with its blockbuster deals and its (now-defunct) Angels show, tied in controversy and scandal, faced a years-long demise before rebranding and re-entering the cultural lexicon.
"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 Victoria's Secret & Co. CEO Martin Waters, in a 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. In partnering with the incredible team at Adore Me, we will move to the future much faster."
The move to buy membership-based, online-only Adore Me is part of Victoria's Secret renaissance and relevancy strategy. Adore Me is also known for its inclusive approach to sizing and, notably, it became the lingerie industry's first certified B corp just over a month ago.
Slated to close in January, the transaction involves a $400 million upfront cash payment from Victoria's Secret with additional cash consideration based on Adore Me's performance over the next two years.
After raising $8.5 million in a 2013 venture capital round, Adore Me garnered headlines for its professed goal to give Victoria's Secret a run for its money. Along with a slew of other startups, it may have eaten some of the mall chain's market share over time, but not enough to defeat the lingerie giant. That still doesn't mean the road ahead will be easy for Victoria's Secret: Almost 10 years later, according to Business of Fashion, it has seen sales fall in recent months, attributing sinking numbers to macroeconomic factors like an impending recession.
This acquisition allows Victoria's Secret to expand its customer reach while exploring company growth through the power of technology, sustainability, inclusive sizing and try-at-home services.