(Yicai Global) April 8 -- Victoria’s Secret is divesting its China operations to a joint venture formed with Chinese underwear maker Regina Miracle that will operate all Victoria’s Secret’s brick-and-mortar stores and online businesses in the country and in which the US lingerie brand will retain a majority stake.

Hong Kong-based Regina Miracle has taken 49 percent equity and has paid Victoria’s Secret USD45 million in cash as consideration for its investment in the JV, Victoria’s Secret said on April 6. The two parties first said they intended to collaborate in January.

"I am confident this partnership will accelerate our growth opportunity in China by leveraging Regina Miracle’s merchandising and market knowledge, and closer proximity to a rapidly growing potential customer base,” Victoria’s Secret Chief Executive Officer Martin Waters said in the press release.

The cooperation with Regina Miracle may be a new starting point for the US lingerie maker to expand its business in China. International sales only accounted for 7 percent of the world’s largest underwear retailer’s revenue last year at USD746 million, according to its latest financial report. As of Jan. 22, the Ohio-based company had 899 outlets worldwide, only 65 of which are in China.

"We believe our business is underpenetrated internationally and double-digit sales and profit growth is a realistic opportunity, both in the near-term and over a long-term time horizon," Waters said.

However, in its guidance for the first quarter of the fiscal year 2022, the firm did not anticipate the tie-up to have a material impact on its previously communicated sales, profit and earnings.

Regina Miracle has two production bases, one in China and one in Vietnam, and employs around 46,000 people. It has also partnered with other global brands including Calvin Klein, Adidas and Under Armour.

The Chinese underwear maker's share price [HKG:2199] was trading up 0.45 percent at HKD4.48 (USD0.50) as of 11:30 a.m. China time today.

Editor: Kim Taylor