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Articles from FASHION JEWELLERY (286 Articles)

Lovisa has continued its overseas expansion with the acquisition of 21 stores in South Africa
Lovisa has continued its overseas expansion with the acquisition of 21 stores in South Africa

Australian jewellery retailer ‘invades’ South Africa

In what is believed to be its first major move since going public, Australian fashion jewellery chain Lovisa has confirmed a new deal that will significantly increase the company’s international presence.

Lovisa has acquired 21 fashion accessory stores in South Africa for $2 million. Handover of the stores – which were said to be of a similar size to existing Lovisa retail outlets – is scheduled for 1 April 2015, subject to approval by the Reserve Bank of South Africa.

Lovisa CEO Shane Fallscheer told Jeweller this was the first time the company had acquired a competitor, describing expansion until now as “organic”.

When asked why South Africa had been targeted, Fallscheer said, “We have traded in South Africa for four years and we find this market exciting with a rapidly expanding middle class.”

The majority of the newly acquired stores would be rebranded immediately following finalisation of the deal, however, a company statement noted that at least five outlets would close within the next six months due to “crossover” with existing Lovisa stores in the region.

The new stores were expected to contribute a $1.75 million operating profit in the 2016 financial year.

Shane Fallscheer, Lovisa CEO
Shane Fallscheer, Lovisa CEO

“We are very excited by this transaction as it quickly takes us beyond 30 stores in South Africa, positioning us as the largest fashion jewellery retailer in South Africa and giving us a national footprint of stores in what is one of our most successful markets,” Fallscheer said.

“This places Lovisa well ahead of our growth forecasts and enables us to continue to look for opportunities in South Africa whilst moving our focus to other growth markets, both company-owned and franchise.”

There were 12 Lovisa stores operating in South Africa as of 31 October 2014, and this number was expected to increase to 35 by mid-year.

The company’s forecast also indicated there would be 150 Australian stores operating by June – seven less than the total number in operation at the end of October last year.

Commenting on this, Fallscheer explained, “In our domestic markets [Australia and New Zealand], we feel we are at maturity and we will continue to explore other international territories both in Asia and further afield.”

Overall, the company expected to have 244 stores by June compared to the 220 in 31 October.

Competitive market – Lovisa, Equip and Colette

According to industry research firm IBISWorld, “the fashion jewellery retailing industry has achieved stellar growth over the past five years, having been somewhat unaffected by the tough trading conditions that have plagued other retail industries”.

IBISWorld research suggested that the category achieved revenues in excess of $580 million and has experienced an annual growth rate of 5.8 per cent.

There is no doubt that the fashion jewellery and accessories retail sector has become a hotly contested market dominated by three major chains: Lovisa, Equip Accessories and Colette by Colette Hayman. 

As shown in the charts below, total Australian store counts between the three brands are currently at 359, whereas it was closer to 140 in 2010 – the time Colette Accessories was launched. 

In an interesting twist, Colette Hayman was the founder of Diva and was also the former business partner of Brett Blundy after his company, BB Retail Capital (BBRC), took a stake in her fledgling business.

Diva – which reached close to 200 stores in Australia and New Zealand – fell by the wayside under BBRC in favour of Lovisa. Hayman launched Colette by Colette Hayman in 2010 after sitting out of the industry for three years due to a non-compete clause in the sale of Diva to BBRC.

The first Colette Accessories store opened in the Sydney CBD and, at the time, Hayman boasted that she would have 120 stores within three years. The business was subsequently rebranded as Colette by Colette Hayman, and by June 2014 Hayman had achieved 118 store openings – 102 in Australia and 16 overseas. 

In mid-2014, Mark Hayman announced that Colette by Colette Hayman was “looking to expand its affordable fashion message into Asia, Europe and North America, including the United States”, and hoped to open 150 new stores under a franchise business model.

As previously reported by Jeweller, Lovisa was listed on the Australian Securities Exchange on 18 December 2014. Prior to this, the private company was majority-owned by Blundy’s BBRC, which retains a controlling interest of 41 per cent.

Total store count – APRIL 2015

Colette by Colette Hayman38242213724116127
Equip Accessories321321680301699

Growth over past 12 months

Lovisa - May 201449343225944136194
Lovisa - April 2015473741241033162228
Colette - May 201434232011724116118
Colette - April 201538242213724116127
Equip - May 20144323239813117128
Equip - April 2015321321680301699


More reading
Buoyant Lovisa stock paves way for expansion
Lovisa jewellery chain to go public
Diva jewellery chain in liquidation?
Diva jewellery stores shutting down, or maybe not!

Baume & Mercier

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