Fashion jeweller Lovisa has acquired the European retail store network of German jewellery wholesaler Beeline GmbH for €60 (sixty euros - $97 AUD).
Lovisa will acquire shares in six of the retail entities of the Beeline business across Germany, Switzerland, the Netherlands, Belgium, Austria and Luxembourg, with all continuing stores to be rebranded to Lovisa.
The acquisition is expected to add more than 80 additional stores to Lovisa's global network across the six European countries.
The Beeline business currently operates 114 retail stores in seven countries selling fashion jewellery under the 'Six' and 'I Am' brands.
Speaking on the acquisition, Lovisa MD Shane Fallscheer said that the acquisition will help to further expand the brand in the European market.
"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 and into the future as part of our ongoing global rollout strategy," he said.
Lovisa has also entered into a Put Option agreement in relation to the purchase of Beeline France, which operates a store network of 30.
The agreement provides Beeline the option to sell the shares in Beeline France to Lovisa following the completion of mandatory consultation with the business' employee works council.
To support its expansion in Europe, Lovisa has also made further investments into its eCommerce capabilities.
The jeweller is in the process of implementing enhanced multilingual capabilities to support its European customers, as well as investing in a local warehouse in the region which will support both the bricks and mortar and eCommerce channels.
The acquisition of each country will progressively take place from March 2021 through to May 2021, with Lovisa expecting to invest less than €5 million in the store fitout, inventory and conversion of stores.
Upon completion of the acquisition, Lovisa will take over approximately €3 million of bank guarantees associated with the leases of the purchased Beeline entities.
Lovisa will also provide a further €3 million bank guarantee to the vendor to support its obligations under the share purchase agreement, which expires on 31 March 2022.
These guarantees will be funded through existing credit facilities.
As part of the acquisition, Beeline ensured a cash level of the entities of €9.87 million ($16 million AUD) in aggregate.
At present, Lovisa's existing 24 stores in France and 39 UK stores are temporarily closed due to the resurgence of COVID-19 in these regions.