Michael Hill jeweller's exit from US to cost US$4.5m




Michael Hill International said the exit from its US business is expected to cost US$4.5 million for lease terminations and employee severance costs after it was unable to find a buyer for the jewellery stores.

Melbourne, Australia - August 24, 2017: A pedestrian walks past a Michael Hill jewelry store at the corner of Little Collins and Elizabeth Streets in the Central Business District of Melbourne, Australia.

Michael Hill jeweller.

Source: istock.com

The jewellery chain decided to wind up its US business in January after a decade-long investment failed to build a profitable business and the company said all nine US stores will close around April 30 and the staff offered redundancy and support.

"Efforts to find a purchaser for the US business did not result in any satisfactory offers," Brisbane-based Michael Hill said in a statement to the New Zealand stock exchange.

Michael Hill, founded by its namesake with a single store in Whangarei in 1979, is this year pulling back from some of its recent expansions with the closure of its US business and repositioning and downsizing of its Emma Roe chain, with 24 of the stores to close at a cost of A$5.8 million-to-A$7.9m.

Sales at Michael Hill stores in its continuing business in Australia, New Zealand and Canada increased 4.9 per cent to A$441.6m in the nine months to March 31 as the company opened 15 new stores, taking the total to 314. Excluding new store openings, same-store sales lifted 1 per cent.

Six new Michael Hill stores opened in Australia, taking the total to 171, helping sales over the nine months to increase 1.7 per cent to A$252.7m.

In New Zealand, two Michael Hill stores were opened, taking the total to 52, with sales lifting 4.3 per cent to NZ$96.9 million.

Meanwhile, in Canada the Michael Hill chain grew by seven, taking the total to 82 and boosting sales 17 per cent to C$98.2m.

The dual-listed shares last traded at $1.16 on the NZX, having declined 15 per cent over the past 12 months.

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