Michael Hill closes six stores, axes senior managers amid tough retail environment

Well-known jewellery chain Michael Hill has revealed it closed six stores in the past six months and scrapped senior management roles due to tough retail conditions.

In a trading update released by the stock market listed company, it described the six months to December 31, 2023 as a “challenging period for the business” as its profitability took a hit and is estimated to be down 45 to 39 per cent on the same period of 2022.

Of the six “underperforming” stores it closed, one was in regional WA, one in Queensland, one in Victoria, two in NSW and one in Canada.

In the statement, the company blamed economic conditions for “impacting consumer sentiment”, adding that its profit margin was affected by the inflated cost of gold and diamonds, and “aggressive competitor behaviour”, which led to a decision to “reduce operating costs, including the exit of a number of senior management roles”.

It did not reveal how many staff or which roles were affected.

Michael Hill also owns the more affordable Bevilles chain.

Michael Hill also owns the more affordable Bevilles chain.

The company achieved sales of $362.8 million during the six months to December 31, 2023, which was up 4.1 per cent on the same period of 2022.

But it revealed its gross profit for the period was expected to be between $30-33 million, which represents a fall of 45 to 39 per cent from the gross profit of $54.5 million it posted in the second half of 2022.

Earlier in 2023 the company bought the more affordable Bevilles jewellery chain, and it opened four new Bevilles stores in Australia during the past six months.

Michael Hill CEO and managing director Daniel Bracken said profit margins were hit in the second half of 2023. Picture: Richard Walker.

Michael Hill CEO and managing director Daniel Bracken said profit margins were hit in the second half of 2023. Picture: Richard Walker.

Source: news.com.au

Michael Hill to Close Stores in Canada

Michael Hill to Close Stores in Canada

Michael Hill will temporarily close all its Canadian stores amid the coronavirus pandemic, while locations in Australia and New Zealand currently remain open.

The jeweler’s Canadian stores are set to shut for a two-week period, but the company will reevaluate and may lift or extend the shutdown as necessary based on the health situation, it said last week. During the closure, most of the jeweler’s workforce will either be given leave without pay, or may take unused vacation time.

Additionally, the company will not provide revenue guidance for the fiscal year ending June 30, as it has not fully assessed the impact of the virus on its sales.

“In the last two weeks there has been a significant drop off in foot traffic in each of our trading markets and we are seeing a corresponding impact on sales,” the jeweler said. “The company will provide further details when they are available as part of our regular [third-quarter] trading update in early April. [We] have not provided guidance on earnings for the current financial year, and are not in a position to [give] a reliable forecast.”

Any existing analyst forecasts are also not reliable, as they were prepared without taking into account the current trading environment, Michael Hill observed.

The retailer plans to reduce any non-essential spending during this time, and will implement a hiring and travel freeze, it said. It is also speaking with its landlords about temporary rent relief during the shutdowns.

“During these challenging times, the health and safety of our people and customers are foremost in our minds,” said Michael Hill CEO Daniel Bracken. “The board and management team are confident that the business will be able to continue to work constructively with all of its stakeholders to navigate the uncertainties presented by the COVID-19 public-health crisis. We are focused on taking all necessary actions to reduce our costs and cash outflows so that they better match the very subdued demand in all our markets.”

Source: diamonds.net

Michael Hill’s US Sales Fall

Michael Hill jewellers

Michael Hill’s US sales dropped in the past fiscal year as the Australia-based jeweler struggled in the key market.

Revenue from American operations slid 12% to $12.5 million, while same-store sales fell 8.5%, the retailer reported Monday.

Michael Hill has attempted to revive growth in its US network by appointing Brett Halliday — a successful head of the group’s Canada division — as head of the stateside business. However, the US stores continued to perform weakly, Michael Hill said.

“Our US business underwent a lot of change during the year including a leadership change and a new advertising direction,” the company said. “As a result, it struggled to improve performance.”

The company closed a store in Columbus, Ohio, due to poor performance, and wrote off the value of its outlet in Roosevelt Fields, New York.

Halliday “is reviewing the US business based on his learnings from the Canadian market and making adjustments to the model as required,” Michael Hill explained.

Total company revenue grew 6% to $461.8 million (AUD 583 million), driven by a stronger performance in Australia, where sales increased 4%, and Canada, where revenue leapt 18%. Sales in the retailer’s New Zealand stores slipped 0.8%. Group profit grew 67

Source: Diamonds.net