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Six underperforming Michael Hill stores have been closed – five in Australia and one in Canada. MHI oversees 302 stores worldwide. | Source: Michael Hill

Economic pressure: Michael Hill announces store closures, job cuts

Posted January 22, 2024 | By Samuel Ord

Michael Hill International (MHI) has confirmed job cuts and store closures after a sharp decline in first-half earnings.

The retailer is expected to report comparable earnings of between $30 million and $33 million for the first half of the financial year, a decline of between 39-45 per cent on a year-on-year comparison.

This announcement comes just weeks after the release of Jeweller's 2024 State of the Industry Report, which recorded store counts for every chain in Australia. MHI had 171 locations in Australia at the time of publication.

The retailer recently opened four new Bevilles locations; however, six underperforming Michael Hill stores have been closed – five in Australia and one in Canada. Michael Hill International currently oversees 302 stores worldwide.

“While the first half was definitely a challenging period for our business with sales for the core Michael Hill brand down, we are encouraged by our performance against the broader jewellery sector,” CEO Daniel Bracken said.

Background reading: 2024 State of the Industry Report

Daniel Bracken, CEO Michael Hill International

"While the first half was definitely a challenging period for our business with sales for the core Michael Hill brand down, we are encouraged by our performance against the broader jewellery sector."

Daniel Bracken, Michael Hill International

"Clearly, margin was under pressure from both input costs and promotional activity, and inflationary forces saw elevated costs across many aspects of the business, which together impacted EBIT [earnings before interest and taxes] for the half.”

He added: “As a result, the company has taken direct actions to reduce operating costs, including the exit of a number of senior management roles.”

Group sales are expected to improve by 4.1 per cent, reaching $362.8 million. Sales at the recently acquired Bevilles have improved; however, sales at Michael Hill locations have declined.

Sales in New Zealand were particularly impacted, decreasing by 10.3 per cent. Digital sales accounted for approximately eight per cent of total revenue.