Richlister Maxine Horne takes $9m hit on end of Telstra marriage
A Brisbane richlister’s wealth has taken a $9m hit in just a matter of hours after Telstra announced it would end her company’s agreement to run its chain of retail shops.
Queensland multi-millionaire Maxine Horne has taken a $9m hit after Telstra announced it would end her company’s 26-year agreement to run its chain of retail shops.
Telstra said it would move its branded retail store network to a full corporate ownership model ending Brisbane-based Vita Group’s current dealership agreement in June 2025.
The decision will likely accelerate Vita’s diversification into its chain of health and wellness clinics. Founded by Ms Horne and her former husband David McMahon in 1995 with a single shop on the Gold Coast, Vita now has revenue in excess of $700m. It operates 100 Telstra shops, technology accessories brand Sprout and 21 Artisan wellness clinics.
Vita shares slumped 28 per cent to 82c cents on Thursday as investors feared the end of the Telstra deal would hit the company’s bottom line. Ms Horne’s 29.67 million shares in the company fell in value $9.4m to $24m. The shares closed at 81.5 cents, down 31 cents.
Ms Horne, who is the state’s most high-profile female chief executive of a listed company, said that despite conclusion of the company’s 26-year partnership with Telstra, Vita was strategically prepared to grow in other areas.
“Vita has been investing in the very attractive category of skin health and wellness for some time creating a growth opportunity for the group,” Ms Horne said.
The company was on track to build a network of Artisan branded clinics nationally with the ultimate aim to have up to 90 outlets, many located in wealthy suburbs such as Mosman in Sydney or Hamilton in Brisbane.
The billion dollar non-surgical beauty treatment industry is being driven by an increasingly affluent ageing generation and social media. Vita shares have slumped 85 per cent from a high of $5.72 in September 2016 as earnings from its Telstra agreement declined.
Vita’s relationship with Telstra was hit in 2017 when the phone giant said it would slash payments to Vita, which at the time ran 105 Telstra stores and 23 Telstra business centres.
Vita still gets the lion’s share of its revenue from the telecommunications business, with those operations contributing $752m last year compared to skin care and wellness clinic’s $20.1m.
Ms Horne said in an interview in 2019 that while telecommunications was still a good stable business that produces a lot of cash “the glory days are over.” “This (beauty sector) is a market that has high margins but is highly fragmented. It reminds me of what the telco sector was like 25 years ago,” she said.
English-born Ms Horne and her then husband started the company, originally called Fone Zone in 1995, with one store at Pacific Fair on the Gold Coast. The couple saw an early opportunity to sell phones in shopping malls, despite a landlord telling them that people did not buy mobile phones in malls. The business went public in 2005, with Horne and McMahon as joint CEOs. When the couple’s marriage ended in 2013, Horne was appointed as sole chief executive in 2014 and McMahon left the business.
In her interview with The Courier-Mail in 2016 she said spent most of her early years living with her grandparents after her parents split up and while her gasfitter father was away working on oil rigs. Her late grandparents still loom large in her life, describing them as “kind and decent” working class people who provided her with a lasting moral compass.
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