Michael Hill Loses More Sparkle
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NZ jeweller Michael Hill’s self inflicted ‘diet’ has seen staff at nine stores in the US lose their jobs after the group was forced to close the locations after failing to find a buyer.
Michael Hill revealed on Thursday that it had failed to get any “satisfactory offers” after announcing plans to close the nine stores in January and then putting them on the market a month later.
As a result, the nine stores will shut before April 30. All staff will be offered redundancies and support.The total cost of exiting the US, including the cost of cancelling leases and paying employees, was estimated to be US$4.5 million (NZ$6.1m).
Earlier this year, Michael Hill International chief executive Phil Taylor said the US business was being abandoned because it had struggled to provide a return, despite “significant investment” since entering the market in 2008.
He said the US market was highly competitive and sales figures for the nine months to March 31, also released yesterday confirm the problem with a 13.9% slide to $A10.2 million from the same period in 2016-17.
Meanwhile, sales at its 30 Emma & Roe stores also dropped 5%, from $A9.9 million to $A9.4 million.
"Emma & Roe results during the third quarter have been negatively impacted by the announcement to reduce the brand's store footprint," the company said in a statement on Thursday.
Last month, Michael Hill announce it was closing 24 of its Emma & Roe jewellery stores and would refocus the remaining six. This followed a review into the trans-Tasman charm jewellery brand, which identified customer demand for lower cost products.
The company has found it tough to compete in this segment, especially against the still fast growing Lovisa chain.
The company employs about 168 across the affected shops, some of whom will be transferred to other Michael Hill stores, while others will be made redundant.
New Zealand's only Emma & Roe store in Auckland will close, affecting up to seven staff members. The six remaining stores will be in the Brisbane.
Meanwhile the company also revealed another slide in sales from its Michael Hill-branded Australian stores with same store sales down 0.3% in the nine months to March 31 compared to a year ago.
But same store sales at its New Zealand and Canadian Michael Hill stores were up 3.7% and 4.1% respectively. The dual-listed retailer’s shares on the ASX were steady on $A1.12
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.