Adore Me weighed on Victoria’s Secret & Co.’s operating income in fiscal year 2025. The intimates company recognized a $120 million pre-tax impairment charge related to certain Adore Me assets, which partly contributed to the retailer’s operating income decrease for the year.
Victoria’s Secret & Co.’s fiscal 2025 operating income declined $39 million from the year before to $271 million, per the company’s annual report. That’s despite a $100 million increase in the company’s gross profit for the year and a net sales bump of 5%, reaching about $6.6 billion.
The Adore Me impairment charge — which totaled $90 million after-tax — stems from the retailer’s decision in Q4 to initiate a strategic review of DailyLook on a stand-alone basis. DailyLook is an online personal styling service that was part of the retailer’s $400 million acquisition of Adore Me in 2023.
After Victoria’s Secret separated the assets of Adore Me and DailyLook, the retailer determined Adore Me’s stand-alone operating cash flows showed it should be evaluated for impairment. That evaluation found that Adore Me’s estimated undiscounted future cash flows were less than its carrying value.
Victoria’s Secret found that fair values of the definite-lived intangible and property and equipment assets from Adore Me were “nominal,” resulting in the impairment charge, per the report on Friday. Victoria's Secret and Co. did not directly respond to Retail Dive's request for comment regarding the impairment charge or overall health of the Adore Me business, but highlighted the retailer's latest earnings call from March.
”We also continue to assess the Adore Me business and explore opportunities to optimize it within our portfolio,” Victoria’s Secret & Co. Chief Financial and Operating Officer Scott Sekella said on the Q4 earnings call. “As a result of this ongoing review, we recently discontinued Adore Me's intimates-based subscription offering and converted it to a loyalty program designed to provide customers with a flexible, improved and seamless shopping experience. We also decided to exit the Adore Me distribution center in Mexico, and we have transitioned all fulfillment operations to the U.S.”
The retailer’s acquisition of Adore Me occurred prior to CEO Hillary Super’s appointment in 2024. Since joining the retailer, Super has embarked on a large turnaround effort and revamped the company’s leadership team, with Adore Me founder Morgan Hermand-Waiche exiting in 2025. He was replaced by Christine Vellani, who serves as president of the DTC brand.
Separately from the steep impairment charge, Victoria’s Secret also recognized a $36 million pre-tax charge relating to “unique operational disruptions” causing restructuring of its Adore Me and DailyLook fulfillment operations.
