Michael Hill International plans to exit 24 of the stores in its unsuccessful Emma & Roe chain at a cost of $NZ6m to $8.5m, repositioning the remaining six stores in the 'demi-fine' jewellery segment.
Michael Hill jeweller.
The Brisbane-based company expects to close the 24 stores by June 30 this year, it said today.
The company is negotiating exit terms with landlords and will redeploy staff to its Michael Hill stores where possible and offer impacted employees redundancy and support, it said.
The jewellery manufacturer and retailer launched the Emma & Roe brand in April 2014. In 2016 it said the chain, which sold charm bracelets and accessories, could expand to 200 Australasian stores and as many as 100 in Canada.
However, the company said a review of the brand had identified an opportunity in the relatively new "demi-fine" jewellery segment and said a six-store footprint would provide the opportunity to iterate the new model at speed.
Last month, Michael Hill posted a 66 per cent drop in first-half profit, mainly reflecting $A19.8m of provisions to reposition the Emma & Roe chain and to recognise costs of exiting the US market.
In the first half, Emma & Roe achieved a 20 per cent gain in sales to $A10.5m but recognised a $A15.2m charge for impairments and onerous leases, resulting in an $A19.6m loss in earnings before interest and tax.
Michael Hill, named after its founder, has expanded from a single store in Whangarei in 1979. At the end of last year, it had 172 Michael Hill stores in Australia, 53 in New Zealand and 83 in Canada as well as the nine US stores earmarked for closure. Some 29 of its Emma & Roe stores were in Australia, and one in New Zealand.
Its shares last traded at $1.16, having shed 18 per cent over the past year.