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Michael Hill has announced its quarterly financial results on the back of its new retail strategy
Michael Hill has announced its quarterly financial results on the back of its new retail strategy

Michael Hill sales slump, but company shows signs of improvement

Releasing its quarterly trade update recently, Michael Hill International revealed that same-store sales shrunk 1.5 per cent and total sales 0.8 per cent year-on-year. The share price slipped 7 cents to 60 cents in the wake of the news.

But while those numbers may seem discouraging, they are a marked improvement on the international jewellery chain’s previous two quarters, which showed same-store sales falling 11 per cent and 2.9 per cent consecutively.

The company put the good news down to its new integrated, customer-lead operating model, adopted in March, which focuses on more closely aligning merchandise, marketing and retail.

It is designed to position Michael Hill as a fashion destination where consumers can build a ‘wardrobe of jewellery’ rather than a special occasion retailer, and will emphasise the release of multiple on-trend collections per year.

Daniel Bracken
Daniel Bracken
“We are encouraged by the progress being made as we create a more sustainable business model for the future.”
Daniel Bracken, CEO Michael Hill International

Daniel Bracken, CEO Michael Hill, said in a statement, “The company’s performance continued to stabilise during the quarter as refinements to the strategy improved our position,” adding, “We have already seen the potential for the new integrated model to lift customer engagement and sales, as well as improve operational efficiencies.”

Michael Hill closed five under-performing stores during the quarter – including the final Emma & Roe location – and opened one new site.

E-commerce now represents 2.9 per cent of total sales, and is up 53 per cent when compared to the same period in the 2018 financial year.

The company also made redundant 27 staff at its Brisbane headquarters in mid-February, as part of cost-cutting measures. It was reported that the job losses came across ‘all sections, from manufacturing to office administration’.

Bracken added, “This is an exciting time for the company... We are encouraged by the progress being made as we create a more sustainable business model for the future and deliver value for shareholders.”

In Australia, same-store sales were down 3.4 per cent, which analysts attributed to challenging overall conditions for retail. However, the results were worse across the Tasman, with the company’s New Zealand operations reporting same-store sales down 6.3 per cent due to slowed consumer sentiment and spending in the wake of the Christchurch shooting.

Michael Hill operates 171 stores in Australia and 52 in New Zealand.


More reading:
Michael Hill CEO resigns
Michael Hill closes remaining Emma & Roe stores

 
















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Monday, 27 May, 2019 06:45pm
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