- Lovisa (LOV) has now re-opened all of its store locations worldwide following temporary closures due to the COVID-19 pandemic
- Australian stores were the first to resume trading in mid-April, with the U.K. the last to open in late-June
- As a result of the shutdowns, the company reported a drop in sales revenue for the year ended June 28, 2020, down to $237 million from $249 million the year before
- The company has also made the decision to exit the market in Spain due to a lack in support from its landlords
- Lovisa shares are grey at market open, last trading for $6.11 each
Lovisa (LOV) has now re-opened all of its store locations worldwide following temporary closures due to the COVID-19 pandemic.
By the end of March this year, the Victoria-based jewellery company had suspended operations at the majority of its stores. Australia was the first to re-open its locations in mid-April, and with restrictions continuing to relax in other parts of the world, the U.K. followed suit in late-June.
However, the shutdowns did not come and go without leaving a substantial impact on Lovisa’s financials. The company reported a drop in revenue for the year ending June 28, 2020, down to $237 million from $249 million the year before. On average, store sales for those that have resumed trading are down 32.5 per cent compared to the 2019 financial year.
That said, any further reductions in revenue were partially offset by the company’s online business, which grew 256 per cent during the fourth quarter of the year.
Lovisa noted that while its operations are returning to a relatively normal level, the impact of the virus and the challenging market it brought has resulted in an inability to predict future trading patterns.
In addition, the company revealed that it will be exiting the market in Spain. Store rollouts in the country had previously been put on hold due to underwhelming performance, and while some progress was being made prior to the onset of COVID-19, Lovisa says it is disappointed by the level of support from its landlords.
As a result, the company has made the decision to not re-open its store locations in Spain and will withdraw from the segment entirely.
Lovisa is anticipating that this will result in an impairment charge of approximately $3.3 million in the 2020 financial year.
Lovisa shares are grey at market open, last trading for $6.11 each at 10:26 am AEST.