Victoria’s Secret & Co. (VS&Co) has signed a definitive agreement to acquire digitally native intimates brand Adore Me for an initial upfront $400 million cash payment plus further cash consideration. VS&Co plans to leverage Adore Me’s expertise and technology to continue to improve the Victoria’s Secret and PINK shopping experience and accelerate the modernization of VS&Co’s digital platform.
Additionally, Adore Me will serve as a growth vehicle for VS&Co and provide the retailer access to a consumer demographic that is complementary to its existing customer base. Adore Me serves more than 1.2 million active customers and is a Certified B Corporation, which also will help VS&Co further its sustainability goals.
“I’m absolutely delighted to be announcing this transaction, welcoming Adore Me into the VS&Co family,” said Martin Waters, CEO of VS&Co in a statement. “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 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.”
Adore Me has been a rival of VS&Co, particularly since it launched its own physical footprint in 2018. The brand put a greater emphasis on inclusivity than VS&Co, such as through its wide selection of extended sizes. This approach also carries over into marketing — Adore Me uses many smaller, non-professional influencers to build deeper engagement with its customer base.
This experience can help VS&Co build out its own inclusivity efforts and help the brand reach a broader audience. The retailer saw sales drop from $7.5 billion in 2019 to $6.6 billion in the 12 months ended Q2 2022, which ended July 30, due to what it termed “execution missteps,” but it is now taking steps to reach annual sales of $7.3 billion by 2025 through initiatives such as launching a digital-only tween brand and introducing a platform dedicated to women- and minority-owned or -led brands.
Adore Me also has leveraged differentiated customer experiences such as the Home Try-On offering, which VS&Co plans to adopt to complement its brick-and-mortar offerings. The digital-first retailer’s eco-conscious programs, such as its curated marketplace for sustainable fashion brands Sustainabl.com, also can help shore up VS&Co’s sustainability bona fides.
“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,” said Morgan Hermand, Founder and CEO of Adore Me in a statement.
The transaction is structured to include the fixed upfront payment plus an additional portion based on the performance of Adore Me and achievement of specific growth and synergy targets over a two-year period. The deal is expected to close by the end of January 2023, subject to customary closing conditions and regulatory clearances.