CASSANDRA ACQUAH | LEGAL JARGON WRITER
The COVID-19 pandemic has seen many retailers struggling to keep up with the costs to keep their business running on the same level as it was before the outbreak. Victoria’s Secret’s parent company L Brands recently announced its plans to reduce its workforce by 15% at its Columbus, Ohio headquarters, with 850 people due to lose their jobs.
As a result of these redundancies, the company aims to obtain $400 million in annual savings.
They have also undergone other cost-cutting measures such as shutting down large numbers of their stores and negotiating for rent-relief with their landlords. In May, Victoria’s Secret announced they would be permanently closing 250 stores across North America. In the same month, in light of the pandemic, private equity firm Sycamore Partners backed out of their $525 million acquisition of the retailer which would have seen them gain a 55% stake in the company.
These drastic changes in the business has also circulated doubt regarding the future of its UK stores, which have also been facing troubles.
It was June 5th when the UK arm of Victoria’s Secret went into administration putting over 800 employees at risk across its 25 stores. After instructing Deloitte to assess the impact of COVID-19 on the retailer’s business, it was stated they would conduct a “light touch” administration as it sought out a potential buyer.
Retailer Next is currently in the final stages of their acquisition deal of the UK arm of Victoria’s Secret, having been handed exclusive rights to negotiate until September. It will be interesting to see the future of the company and how this major deal will alter the course of the Victoria’s Secret business.
There has been an impact on the UK arm of Victoria’s Secret not having its own website. In light of the pandemic, where we’ve seen a huge increase in the amount of online shopping, this would be a good move for the business in an effort to stay competitive in the market and increase its sales.
Laying off that many employees is going to reduce the company’s costs, leaving them with more money, especially important at this time when the revenue from sales has been decreasing for a long time, even prior to the pandemic.
In regards to the employees being axed from their jobs in the US, which clauses are included in their contracts to give them a fair exit from the company?.
Cassandra is an aspiring solicitor with interests in retail and media, as well as the steps being taken to increase diversity at all levels within the legal sector.
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