Last Updated on August 6, 2025 by Jason Andrew
If you thought that the ‘Founder problem’ fit matters – think again.
60 year old Brett Blundy has made a killing selling trendy jewellery to 20-30 somethings looking to glam up their accessories.
Earrings, necklaces, rings—you name it.
Where most blokes would see female fashion and run away, Brett leaned in.
His insight?
“The vast majority of females just love to buy things, and the more often they can buy them the better.”
Amidst a sea of other fast fashion giants like Fashion Nova, Shein and Temu, Lovisa has become an Aussie homegrown retail powerhouse.
With a market cap of ~$3.0bn, the business is on track to hit 1,000 stores this year. And there’s still a lot of room to run.
Let’s break down the story of Lovisa.
Who is Brett Blundy?
As much as Brett might look like your average 60-year-old bloke, he is actually a retail shark.
Brett got started in the retail industry back in the 1980’s by purchasing a record shop called ‘Disco stick’ in Pakenham, Victoria.
Within the first 6 months of ownership, they grew store turnover from $2k / month to $15k / month.
He then went on to start Bras N Things, a popular female underwear retailer, which grew to over 200 stores, and eventually sold to private equity for ~$500m.
Needless to say, by the time Brett went onto start Lovisa in ~2010, he was already worth tens, if not hundreds of millions of dollars, and had 3 decades of experience in the retail sector. An industry titan.
Lovisa Origins
The journey of Lovisa began as another store called ‘Diva’.
Diva was a jewellery store targeting teenagers and younger women.
The business ran into trouble in the 2000’s after they launched Playboy branded accessories, getting backlash given how young their audience was.
Realising there was a bigger market going after a slightly older demographic (20-40 somethings versus teenagers), Blundy switched gears and launched Lovisa through his PE firm BB Retail Capital.
In 2012, BB ran a trial conversion where 21 Diva stores rebranded and converted to Lovisa stores. These saw immediate uplift and traded much better, proving the suspicions of BB that the Lovisa brand was the one to scale.
By 2014 the total 88 store Diva network was converted to Lovisa.
The same year, Lovisa listed on the ASX for a market cap of $210m, with the combined store network generating a forecasted NPAT of $16.6M (12.6x).
At the time of the IPO (2014) the Lovisa business had 220 stores in 8 countries, a 20-person product team and over 1300 employees around the world.
Since then, the stock is up 14x, and the store network has grown tenfold.
Breaking Down the Business
How does Lovisa work?
Find a jewellery trend. Replicate the trend. Get a cheaper product in store for customers.
Rinse and repeat.
Like many of the fast fashion retailers, Lovisa’s business is algorithmically driven, and optimised for speed in the production process to stay on trend. They aren’t as shameless as MCoBeauty though.
Because the business has vertically integrated design, manufacturing and distribution, their entire process for producing jewellery takes 8-10 weeks. This allows them to release 100 new items of jewellery per week in every store. New products drive customer motivation to return in store, helping retention.
The target market age group is 25-45 years women. Think corporate girlies looking for a “quick fix” of jewellery for the weekend.
The product offering encourages quick and easy browsing in store without the need to check sizes, with customers buying 2.2 items on average and spending $20 AUD per transaction, with most products priced from $7 – $50. This is incredibly low.
Where many of the new retail players have focused on an ecommerce first, heavy paid marketing strategy, Lovisa has done the opposite.
The business actually spends extremely little on paid marketing, and instead focuses on choosing store locations in places with high foot traffic that can drive word of mouth growth.
These aren’t extremely fancy locations though, primarily nooks in shopping centres.
In the words of Shane Falscheer, “We operate in California but not in Santa Monica Boulevard, we operate in the UK but not in Oxford Street… we aren’t carried away with getting into AA locations”.
Operating Leverage
It’s not surprising that Lovisa runs at 18% EBIT margins where other retailers struggle to turn a profit. The business is built for efficiency.
Stores themselves are all 50 square metres or less in footprint, and all have the same layout, with products arranged in a similar fashion.
Having a smaller footprint reduces lease expense. Standardisation also creates efficiencies in terms of store rollout and ensures a consistent customer experience.
The business also in-houses their entire supply chain, with manufacturing done out of Thailand and India, and distribution centres in Hong Kong, Melbourne, Poland and the US.
Listening to management, efficiency also seems to have been a huge focus for the business in the last few years.
“So we’ve got tight disciplines in our leasing and then tight disciplines in our buying and product selection. And those 2 things, combined with some strong operational discipline in the field, has allowed us to achieve what we’ve achieved to date” – HY21 Earnings Call
Let’s Talk Numbers
Because the business is vertically integrated, the margins are actually very, very good.
Lovisa has ~82% gross margins. Software-esque you could say.
Not only that, but there appears to have been a steady margin expansion since HY21 – so the business might be benefitting from operating leverage.
This also speaks to the beauty of fast fashion. Cheaper, high volume products = higher margins.
Topline revenue growth has also been strong, at +9% H1 FY25 growth and +17% for FY24.
Looking historically, revenue is up 2.9x in 5 years, from $242m in FY20.
Moving down the financials, the business does $128m EBIT (+400% since FY20) and $240m in free cashflow. Incredible. It’s no wonder the business’s stock price has been ripping.
The balance sheet is also very clean. The business has a net cash position of $6.7m with almost no debt, and they are well positioned financially for any downturns.
The only bad sign is that like for like sales growth was flat at 0.1% in H1 FY25. Looking historically, LFL sales growth was actually -2.0% for Lovisa in FY24, so it’s not like this is a new problem.
That being said, for discretionary retailers, LFL sales growth is very much tied to the macro environment.
If you look at the trend historically for the business, LFL largely tracked the economy, so this trend is likely to be short term pain.
Source – Strawman.com
Competition
I know what you’re thinking. Isn’t jewellery extremely competitive?
Well, sort of, but not really. Let me explain.
There are general retailers and department stores – but they don’t focus on jewellery.
Then there are players like Pandora and Swarovski that operate at a higher end of the market, selling products for $100 – $500.
But amongst the affordable players, there are actually relatively few direct jewellery competitors.
The largest player is Claire’s, but their demographic skews slightly younger, and many of their stores haven’t been redecorated since the turn of the century.
Source – A rich life
That being said, they could start to see more competition. Domestically, players like Harli + Harper have opened operating with a very similar model.
International Growth
One of the reasons for the success of Lovisa is that they have been extremely good at getting strong returns on capital with their store rollout.
Where many Australian retailers have struggled to grow overseas, Lovisa has thrived. In the words of the former CEO Shane Falscheer,
“An 18 year old girl, whether she’s in Northern England, California, East Coast America or New Zealand, is probably into the same fashion at the same time”. This similarity in global culture has enabled strong growth with a centralised product manufacturing.
But it’s not just the nature of the business, part of this success is also prudent management. In November 2020, Lovisa picked up ~80 stores in Europe for only €60 euros. And no that isn’t a typo.
Management were also extremely disciplined with how they decided to enter new territories, entering ~1 new territory per year.
More recently, they have ramped up international expansion though, entering 7 new markets in FY24 (China, Vietnam, Ireland, Senegal, Ecuador, Guadeloupe and Gabon). The decision to enter lower cost jurisdictions is interesting, and speaks to the price point of the business.
Blundy himself actually relocated to Asia in 2014 in order to focus on international expansion, betting more heavily on growth overseas than domestically.
Lovisa’s journey from a converted Diva store to a global jewellery powerhouse is a testament to Brett Blundy’s retail acumen and the business’s disciplined approach to growth. By focusing on efficient operations, strategic store placement, and a rapid response to fashion trends, Lovisa has carved out a significant niche in the affordable jewellery market. Despite some headwinds with like-for-like sales, the company’s strong financials and continued international expansion suggest a bright future, proving that a well-executed retail model can indeed lead to a multi-billion dollar empire.
