Lovisa shares slide as ex-CEO opens rival Harli + Harpa
Make us a preferred source
Make us a preferred source on Google
The news: Lovisa shares lowered on the ASX as the jewellery retailer's competitor Harli + Harpa, founded by its former chief executive Shane Fallscheer, opened its first store on Thursday.
The numbers: Lovisa shares were down 2.7% to $29.44 by 1:25pm AEDT, having advanced more than 50% over the last 12 months.
The context: Citi kept its 'neutral' rating on Lovisa after visiting the Harli + Harpa store, located in the biggest shopping centre on the Sunshine Coast, Sunshine Plaza.
Citi said its research suggests there might be a "lack of understanding" around Lovisa's in-store execution in some key offshore markets, as well as quality of new stores compared to old stores.
Citi analysts also noted that Lovisa continues to be a highly profitable and scalable business with long duration growth potential. However, it flagged risks of rapid growth pains and uncertainty surrounding its unexpected CEO change.
In June, Lovisa announced that CEO Victor Herrero will depart from the company next year and will be replaced by Smiggle boss John Cheston.
The source: Citi research
