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Victoria’s Secret to acquire Adore Me for $400 million in cash

Victoria’s Secret has entered into a deal to acquire a much smaller rival, Adore Me.

Victoria’s Secret & Co. is adding a digitally native brand to its portfolio.

The lingerie giant said it has signed a definitive agreement to acquire 100% of Adore Me, a value intimates and sleepwear brand known for its inclusive sizing and body positivity, for an initial upfront payment of $400 million in cash. The deal, which comes as Victoria’s Secret has shifted to a more inclusive positioning, will allow the retailer to leverage Adore Me’s digital expertise and accelerate the modernization of Victoria’s Secret online platform.

Founded in 2011 as a direct-to-consumer startup, Adore Me is popular with millennials and Gen Z customers who are attracted by its inclusivity and commitment to sustainability. The company, which counts more than 1.2 million active customers and is powered by a proprietary tech platform, offers monthly subscription and home try-on options. It also operates six physical stores.

“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 Martin Waters, CEO, Victoria’s Secret & Co., which has nearly 1,350 stores in some 70 countries. “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 structured transaction includes an initial upfront $400 million cash payment and further cash consideration, part 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 has been unanimously approved by Victoria’s Secret board and is expected to close by the end of January 2023. It is subject to customary closing conditions and regulatory clearances.

Adore Me noted it has long been a leader in extended sizes and continues to push the category forward in a more environmentally-conscious way as a Certified B Corporation

Adore Me founder and CEO Morgan Hermand-Waiche will continue to lead the business following the acquisition,

“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 Hermand.

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.

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