The market may be pushing higher today, but the same cannot be said for ( ) shares. At the time of writing, the fashion jewellery retailer's shares are down a sizeable 10% to $30.58.
Why are Lovisa shares sinking? Investors have been heading to the exits today after the company that its CEO, Victor Herrero, will be stepping down from the role next year. According to the release, Herrero has agreed to an amended employment contract through to 31 May 2025. After which, the highly regarded CEO will be replaced by John Cheston, who will join the company on 4 June 2025.
Why the reaction? While CEO exits often receive poor reactions from investors, Lovisa shares are falling particularly heavily today. This is because the appointment of Victor Herrero was a real coup for the company and a key reason why many invested (myself included) in the company. The outgoing CEO has been instrumental in Lovisa's global expansion.
And while a lot of the hard work has certainly been done since his arrival in 2021, there's still a lot more to come. The market may be concerned that his exit now puts at risk the successful execution of this expansion. Herrero joined Lovisa having spent 13 years with the Inditex Group, which is one of the world's largest fashion retailers ( , and ).
During his time at Inditex, he held numerous roles including Head of Asia Pacific and Managing Director Greater China and led the company's expansion through this region rolling out 800 stores across multiple countries in.