The Lovisa Holdings Ltd (ASX: LOV) share price has sunk around 10% after the retailer announced its CEO is planning to leave.
Lovisa is a jewellery retailer with a store network worldwide and a significant presence in countries like Australia, the US, South Africa, and the UK.
Lovisa’s CEO is going to leave
The retailer revealed current CEO Victor Herrero has agreed to an amended employment contract to 31 May 2025. In other words, he has agreed to remain at the company for the next 12 months.
Lovisa has been quick to line up a replacement. The company announced it’s appointing John Cheston as Lovisa’s next CEO and Managing Director. John Cheston will join Lovisa on 4 June 2025.
The Lovisa Chair Brett Blundy said:
The board and I are pleased to announce that Victor has entered an amended 12-month contract. The Board and I are also pleased to announce that John Cheston will join us as CEO and Managing Director on the 4th of June 2025. John is a highly successful global retailer and will join Lovisa at a very exciting time as we continue our global growth.
Victor Herrero will be paid fixed remuneration of US$1.3 million per year, with no short-term or long-term incentives granted for FY24. The existing long-term incentive due to vest at the end of FY24 remains in place in accordance with the terms of the plan.
John Cheston will be paid fixed remuneration of A$2.35 million, which works out to be US$1.56 million at the current exchange rate. Cheston can earn a short-term incentive of $2.35 million per year if Lovisa’s EBIT growth is 30% or greater. He can benefit from long-term incentive of a maximum of $2.35 million in FY25, FY26 and FY27 if Lovisa’s EBIT growth is 30% or greater over the prior year.
Final thoughts on the Lovisa share price
Lovisa is significantly cheaper than it was yesterday, so I think it’s better value, but it’s certainly one of the higher-priced retailers on the ASX.
It’s still not cheap, but it’s at a more reasonable level. I like the company’s long-term outlook with its global store count growth, but the market seems to have largely priced that in. I think it could be better to wait for a cheaper price, or look at alternative ASX growth shares for now.
