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Long-time Smiggle boss John Cheston is jumping ship from Solomon Lew’s Premier Investments stable to join Brett Blundy’s global jewellery chain Lovisa Holdings (ASX: LOV) as CEO.
The appointment was announced today in a brief statement to the ASX, although the leadership transition at Lovisa will not occur until June next year.
However, news of the leadership transition sent Lovisa shares more than 10 per cent lower this morning with the stock trading at $30.51, down $3.40 at 12.35pm (AEST).
At this stage, it is unclear if Cheston will join Lovisa as the head of a newly listed Smiggle as part of Premier Investments’ plans to spin off the profitable stationary business provisionally planned for January next year.
Lovisa is offering Cheston a base salary of $2.35 million to take on the CEO’s role, which compares with current CEO Victor Herrero’s revised contract for FY25 of US$1.3 million ($1.95 million) announced today.
Herrero’s contract will expire a month before the end of FY25 on May 31, 2025, with Cheston expected to join the company on 4 June next year.
The appointment of Cheston, who has led Smiggles for more than a decade, is seen as a major coup for Lovisa as the growth of the Smiggle business under his leadership is considered a key driver of Lew’s plans to spin off the subsidiary as a stand-alone ASX-listed entity.
Lew earlier this year revealed that Smiggle could be listed by the end of January next year, while its sleepwear design brand Peter Alexander is likely to become a stand-alone business sometime in calendar 2025.
Smiggle and Peter Alexander were key drivers of profit growth in the first half of FY24, making the case for Premier Investments to separate the assets from its remaining fashion brands that include Portmans, Just Jeans and Jay Jays.
“John is a highly successful global retailer and will join Lovisa at a very exciting time as we continue our global growth,” says Blundy, the billionaire businessman who is chairman of Lovisa.
Prior to joining Just Group as group general manager of Smiggle in 2012, Cheston led Country Road and Webster Holdings.
The appointment of Cheston to lead Lovisa comes just five months after Blundy recruited former Premier Investments CEO Mark McInnes as global chief executive of BBRC, an investment vehicle through which Blundy has stakes in fashion retailers Dissh, Accent Group (ASX: AX1) and Best & Less.
BBRC has a near 40 per cent stake in Lovisa, which Blundy established in 2010 in partnership with Shane Fallscheer.
Lovisa posted a net profit after tax of $53.5 million in the first half of FY24, up 12 per cent from a year earlier as revenue surged 18 per cent to $373 million.
The company operated 854 stores across 40 markets at the end of December, after adding 74 new stores during the half-year period.
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