Lovisa triples online, exits Spain in Q4
Jewelry retailer Lovisa saw its online business more than triple during Q4, up 256 per cent compared to the same period of 2019, though trading conditions across many of its bricks-and-mortar stores fell short due to Covid-19 restrictions.
Comparable store sales fell 32.5 per cent on the prior year, and while performance has been strongest in Australia and New Zealand, the overall disruption to trade caused FY20 sales revenue to fall to $237 million from $249 million in FY19.
And although the business had progressively reopened its stores to the point it now trades across 434 locations, Lovisa will use this opportunity to exit Spain, with stores across the country to remain shuttered.
“As previously announced, the store rollout in Spain was put on hold some time ago as a result of performance below our expectations,” the business said in a release to the ASX on Friday.
“Whilst we saw some improvement in performance prior to the Covid-19 shut-down, Lovisa was disappointed in the lack of support from our landlords in Spain. Hence, due to this lack of support the board has regretfully made the decision not to re-open these stores and to exit the Spanish market.”
The exit will cost Lovisa $3.3 million in impairment charges and associated provisions in FY20.
Lovisa is continuing discussions with landlords in other countries in order to receive rent subsidies or abatements for its current portfolio of stores, as many of the wage subsidy programs it has utilised are no longer available to its team.
That said, the business’ cash position is relatively strong, having almost doubled over the last financial year to $21 million.
“This combined with undrawn financing facilities of $44 million, leaves the business well placed to invest in future growth opportunities as the global economy emerges from the current situation,” the business said.
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