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Vita Group (ASX: VTG), has settled negotiations with Telstra (ASX: TLS) after signing a new remuneration and commercial agreement.
The agreement gives approval for the Vita to operate an additional five Telstra branded retail stores on top of the existing 105 it already manages, which is intended to provide long-term benefits for both companies.
Vita Group has agreed to let go of seven to eight per cent of retail remuneration of FY20, however the figure may be partly offset with the possible expansion of a further 115 stores, as the company has extended its tenure until June 2023.
The deal follows numerous discussions between the parties, and in May this year Telstra was reported to have been considering taking back 11 stores from the Vita Group, a statement the company later clarified was for 'discussion only'.
Vita Group chief executive officer, Maxine Horne (pictured) says the company is pleased with the conclusion and the agreement is a representation of the strategic relationship between Vita Group and Telstra.
"We are very pleased with this outcome which reflects the confidence Telstra continues to place in Vita to deliver results," she said.
"With this key milestone achieved, the Vita team are well positioned to deliver long-term value to our customers, our team members and of course Telstra and our shareholders."
Following this morning's announcement, Vita Group's shares have shot up by 20.4 per cent to $1.50 at 1.45pm AEST.
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