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November 2, 2022

Victoria’s Secret acquires Adore Me in a US$400m deal

Fortune 500 speciality retailer Victoria's Secret said this strategic acquisition reflects Adore Me’s growth potential and combined company synergies.

By Shemona Safaya

Victoria’s Secret & Co (VS&Co) has acquired the online intimates startup Adore Me in a strategic move that it says will position the brand for growth. It plans to finance the transaction at closing with cash on hand.

The structured transaction includes an initial upfront US$400m cash payment and further cash consideration, a portion of which is fixed and a portion of which is based on the performance of Adore Me and achievement of specified growth and synergy targets over a two-year period.

The transaction is expected to close by the end of January 2023, subject to customary closing conditions and regulatory clearances.

VS&Co states this as an opportunity to leverage Adore Me’s expertise and technology to continue to improve their brand and Pink customer shopping experience, including accelerating the modernisation of its digital platform. Both the brands will continue pushing the intimates category forward in a “more inclusive, tech-forward, and sustainable way”.

Moreover, the brand says Adore Me will provide it access to a consumer that is complementary to the brand’s existing customer base.

Martin Waters, CEO of Victoria’s Secret & Co, said: “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. This acquisition will be a significant accelerant as we pivot toward growth and modernise 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.”

Adore Me was named a leading Digital Native Growth Brand in intimates by the NPD group and currently serves more than 1.2 million customers, the startup states. It is powered by a proprietary technology platform with highly differentiated customer experiences including ‘Home Try-On’ and monthly subscription options.

Morgan Hermand, founder and CEO of Adore Me, added: “We have significantly grown our business over the past decade, and are excited to bring our technology, purchase experiences, inclusive assortment, brand and team to join the next phase of Victoria’s Secret’s growth and customer journey transformation.”

The startup said Adore Me’s ‘Home Try-On’ offering generates strong retention among its customers with a personalised product experience and has achieved scale by leveraging a complex combination of proprietary logistics, algorithms, and operational assets.

This shopping experience, Adore Me adds, presents an attractive new option for the Victoria’s Secret customer base and exemplifies the next generation of retail innovation to complement Victoria’s Secret’s best-in-class physical store offering.

Goldman Sachs is acting as financial advisor to VS&Co and Kirkland & Ellis is providing legal counsel. Credit Suisse is acting as financial advisor to Adore Me and WilmerHale is providing legal counsel.

Earlier this year, Victoria’s Secret & Co invested $18m for a minority interest in the women-founded and women-led beachwear and lifestyle brand, Frankies Bikinis.

In June, the Fortune 500 speciality brand announced stable results for the first quarter ended 30 April 2022 with sales results at the high end of its guidance range despite what it described as a “challenging inflationary environment”.

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