On the back of a European acquisition, Jewellery retailer Lovisa (ASX: LOV) has seen its shares bounce back to levels not seen since the COVID-19 pandemic slammed retailers globally.
At its worst point Lovisa was trading at just $2.45 in mid-March 2020, but the company has since bounced back to where it was at in late-February, rising 371 per cent.
Today, shares jumped by 15 per cent to hit $11.54 per share.
Shareholders are rallying in response to Lovisa's announcement that it acquired the European retail store network of German jewellery wholesaler Beeline.
The shares in the Beeline entities will be acquired for a total purchase price of $98 (60 euros), with Beeline ensuring a cash level of $16 million (9.87 million euros) in aggregate.
Beeline currently operates 114 retail stores in seven countries selling fashion jewellery and accessories under the SIX and I AM brands.
All continuing stores will be rebranded to trade as Lovisa stores, which is expected to cost the ASX-listed retailer less than $8 million (5 million euros).
Lovisa will acquire the shares of the six retail trading entities of the Beeline group in Germany, Switzerland, the Netherlands, Belgium, Austria and Luxembourg.
The Australian retailer has also entered into a put option agreement in relation to the acquisition of Beeline France, including a network of 30 stores.
The acquisition of each country is to be completed progressively from 1 March 2021 through to end May 2021.
"We are very excited that this transaction gives us the opportunity to add six new countries to our global store network, and provides us with a strong base and quality team to grow the Lovisa brand further in these markets into the future as part of our ongoing global rollout strategy," Lovisa managing director Shane Fallscheer said.
The acquisition comes as Lovisa stores in France and the UK are temporarily closed as a result of government-imposed COVID-19 lockdowns.
For the remainder of the brand's stores Lovisa says sales are steadily improving as restrictions continue to ease in Australia and New Zealand.
Updated at 11.37am AEDT on 13 November 2020.