- Telstra (TLS) is pulling the pin on all its independently run stores, affecting 104 Vita Group (VTG) venues
- The telco giant announced in today’s half year results that it wants to operate all of its stores itself, affecting around 270 independent phone stores
- The decision brings an end to Vita’s 26-year partnership with Telstra, with the contract to officially expire on June 30, 2025
- Both companies have shied away from stating if the move will cause job losses, with Vita instead stating it will work with TLS to transfer ownership
- VTG’s share price has been in free fall since the Telstra store news hit the market, dropping over 25 per cent during morning trade
- Vita Group shares are now trading down 26.2 per cent at 83 cents each, while TLS shares are up 2.68 per cent at $3.26
Telstra (TLS) is pulling the pin on all its independently run stores, ending its long-standing agreement with Vita Group (VTG).
The telco giant announced the news in today’s half year results, revealing that it wants to transition to full ownership of all of its stores.
The move will affect 104 of Vita Group’s Telstra stores and an additional 166 Telstra branded stores which are run by independent licensees.
It also brings an end to Vita’s 26-year partnership with Telstra, with the contract to officially expire on June 30, 2025.
Commenting on the change, Vita Group’s Chief Executive Officer Maxine Horne said the company is committed to a smooth transition.
“We have a 26-year partnership with Telstra and are committed to working professionally with them to ensure the best possible outcome for all parties,” she said.
“In addition to discussions with Telstra regarding transition arrangements, the remaining period of the Telstra licence arrangement will provide cashflow as we continue to grow the Artisan brand,” she added.
Details of the transition still need to be ironed out between both businesses. Neither party has stated whether the change will lead to job losses.
Telstra Group Executive for Consumer and Small Business Michael Ackland said the store ownership change was designed to make the business more agile.
“This was not an easy decision given that we have enjoyed a long-term partnership with many of our licensees,” he said.
“At the height of the COVID-19 pandemic we were able to redeploy frontline staff from Telstra owned stores to assist customers through our digital channels or via the phone,” he explained.
“It’s this flexibility in how we serve our customers that we’ll be able to unlock with more retail branded stores under Telstra ownership,” Michael concluded.
Meanwhile, Vita Group’s share price has been in free fall since the Telstra store news hit the market, dropping over 25 per cent during morning trade.
VTG shares are now trading down 26.2 per cent at 83 cents each, while TLS shares are up 2.68 per cent at $3.26 at 1:10 pm AEDT.