Vita Group CEO Loses Millions Due To Telstra Store Renegotiation
Vita Group founder and CEO Maxine Horne has seen her stake in the company drop in value by $17 million in a single day.
After the company’s shares closed at $2.23 on Wednesday, an ongoing renegotiation with Telstra disclosed by Vita on Thursday saw shares fall 30.5% to $1.55 at close.
Horne, who currently holds 25 million shares, received $92 million last year for selling the same amount of shares.
Vita and Telstra have agreed to “remuneration reductions” covering the period between December and February due to increased competition in the mobile market and a continuing impact from the rollout of the NBN. Telstra is also looking to reorganise its network of stores into a series of geographic clusters.
“Under the proposal, expandable Telstra licensees will be invited to apply to build their Telstra store networks within a particular geographical region. Given Vita’s scale and position as Telstra’s only Master Licensee, it expects to retain a sizeable portion of the network, of which it currently owns and runs 107 retail stores, with representation in 35 of the 48 Telstra-determined geographic clusters,” Vita said in a statement.
Vita said it did not expect to reduce its number of Telstra stores, but also said it had suspended any plans for expansion pending its discussions with Telstra.
“Creating a geo-clustered network allows for intensity of leadership, which ultimately drives better outcomes for customers,” Horne said in a statement.
“An added advantage is the lower cost that comes from clustering. Vita is already well positioned in this area as it adopted this strategy a number of years ago. This move is absolutely in line with the optimisation program that Vita has undertaken with its own stores over the last three years and we will work closely with Telstra to continue optimising our network and, in doing so, bring mutual benefits to both Vita and Telstra, our customers and our broader communities.”