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Victoria’s Secret & Co. Completes Acquisition of Adore Me, Inc. for $400 million

Victoria Secret’s road of redemption has started promptly since appointing the new Brand CEO Martin Waters. The corporate strategy overhaul comes with particular focus on a promising programmatic M&A push over the coming years. In January 4 the fashion retailer announced that it had completed the 100% acquisition of Adore Me Inc, a digitally-native intimates brand for $400 million.

With this acquisition the Fortune 500 company has taken a major step towards its goal of becoming the world’s leading retailer of intimate apparel. Adore Me's expertise and technology-led business model will allow Victoria’s Secret to continue improving the customer shopping experience and modernize its digital platform, creating sales and profit upside opportunities for the company. Adore Me is expected to generate $250 million of profitable sales in its most recent fiscal year, making it an important long-term growth vehicle for Victoria’s Secret. Together, the two companies aim to lead the global intimates category forward in a more inclusive, tech-forward, and sustainable way, which has been a major critic to the company in previous years.

According to Martin Waters, Victoria Secret evaluated Adore Me as a "two for one opportunity" due its digital-first innovator status in the intimates category and its highly efficient, growing, and profitable standalone business model. This acquisition is expected to be earnings and cash flow accretive in 2023, as VS&Co’s pivots towards growth and modernizes its foundation with technology at the forefront.

Additionally, Goldman Sachs acted as financial advisor to VS&Co’s, while Kirkland & Ellis provided legal counsel. Credit Suisse acted as financial advisor to Adore Me, and WilmerHale provided legal counsel.

In conclusion, Victoria's Secret has been undergoing a transformation for about 17 months, with a focus on female empowerment rather than sex appeal. The acquisition of Adore Me is expected to expand the company's audience online and off, boosting its growth after a difficult summer. The company’s job now is to rebuild the foundation and go back to the fundamentals.

Sources: Victoria Secret & Co, Pymnts, Retail Dive, Vogue Business

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