Aussie cosmetics giant Victoria Secret has made a significant investment in its Australian operation, bringing in its head of cosmetic sales and head of customer service, after spending $1.5 billion on its existing operations in the country.
Key points:Victorian Secret announced it will spend $1 billion to buy back assets in its existing Australian operationsThe move is being seen as a sign of growth for the cosmetics giantThe deal comes as the company moves into the Australian market for the first timeThe Australian cosmetics giant has said it will invest $1bn in its operations in Australia, as it seeks to gain a foothold in a rapidly expanding Australian marketThe Australian government is also set to invest $100 million in its cosmetics business to bring its sales into the countryThe move follows Victoria Secret’s announcement it would spend $500 million on a $1-billion investment in the cosmetics business in Australia.
Victoria Secret’s Australian operations are set to move into a $2 billion cosmetics factory, the first such investment in Australia since 2007.
The investment, which will see Victoria Secret focus on its Australian operations, is seen as an indication of Victoria Secret increasing its presence in the region.
The company, which also operates in Australia’s Queensland and New South Wales, is currently building a factory in Sydney’s inner west and has recently opened an Australian store in Melbourne’s CBD.
A spokesperson for Victoria Secret said the investment would help “enable the company to grow our existing Australian operation and ensure the company remains a global leader in cosmetics.”
The deal is a major blow to the Australian cosmetics industry, as the country is currently in the midst of an economic downturn, with sales down 20 per cent over the last year.
Victoria Secrets Australian operations were set to close by the end of the year, and it will be in the process of relocating to an existing Australian factory in Perth.
It will also sell the company’s remaining brands in Australia to a third-party buyer.
Victoria Secret has not confirmed whether the purchase of its Australian cosmetics will be completed by the time it launches in Australia next year.
The deal follows Victoria Secrets announcement that it will buy back all of its assets, including its cosmetics operations.
“The acquisition of Victoria Secrets assets is a significant step forward for the company and will help to provide additional support for the businesses growth,” a spokesperson said in a statement.
“We are delighted to have secured a strong partner in Victoria Secret who shares our vision and commitment to delivering high-quality products to the consumer.”
Victoria Secrets, which has been operating in Australia for nearly 20 years, will invest more than $1 million in a new Australian operations and move its Australian headquarters to Perth, the spokesperson added.
“As we move into the second decade of our life in Australia we are seeing the impact of the global economic and social climate,” the spokesperson said.
“While Victoria Secret is not a household name, its brands, products and services are now recognised as important in this marketplace and our team is focused on continuing to drive the company forward in Australia.”
The spokesperson said Victoria Secret will remain focused on growing its business in the global market, and is committed to expanding the company globally, including in the Asia Pacific region.
The Australian company has struggled in recent years, as sales have slumped and its international brands have been affected by rising pollution and counterfeit goods.
In July, the company announced it would be shutting down its Australian stores, which had been selling the brand’s products to overseas customers.
In a statement, the cosmetics company said the decision was due to its “challenging environment” and that it was committed to investing more in its global operations.
“It is vitally important that our global operations continue to be aligned with our long-term strategy and we are committed to building and investing in a strong and sustainable Australian cosmetics business,” the statement read.
“Our international operations will remain a cornerstone of our business and the company will continue to focus on building a stronger and sustainable business in New Zealand.”
(ABC News: Sarah Rohan)The company has been a major player in Australia and the US, and in 2017 was valued at more than US$1.3 billion.
While Victoria Secrets has seen an improvement in its finances, its sales in Australia have also dropped.
The cosmetics company has faced a slew of scrutiny in recent months, following a report that a number of former employees at the company were involved in child abuse, including one who allegedly abused a 15-year-old boy.
Victoria Security also faces scrutiny for failing to protect its workers from child abuse claims, which the company said it would address through a “zero tolerance” policy.
Earlier this month, Victoria Secret confirmed that one of its former employees, who had worked at the cosmetics firm since 2006, had been charged with sex offences involving minors.
Victoria Secret also confirmed that it had paid a $10 million fine to the Commonwealth.