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The Vita Group Limited share price has fallen 62% this year

Despite a strong 4% gain today, the Vita Group Limited (ASX: VTG) share price is still one of the worst performers on the local market this year.

In fact, at the time of writing the retailer’s shares are down over 62% since the start of the year.

Why have its shares fallen?

Vita Group’s shares have fallen after details of negotiations with partner Telstra Corporation Ltd (ASX: TLS) revealed that the telco giant plans to cut Vita’s remuneration by 30% over the next three financial years.

As well as this, Telstra plans to restructure its retail store network into clusters, potentially reducing the number of stores that Vita operates.

Whilst this decline has left its shares trading at under 5x trailing earnings, one Motley Fool contributor doesn’t believe investors should be in a rush to invest in the retailer just yet.

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Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool Australia owns shares of Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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