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Articles from DIAMONDS BY TYPE - SYNTHETIC / LAB-CREATED (77 Articles)











Sir Michael Hill and Daniel Bracken, CEO Michael Hill International, celebrated the business’ 40th anniversary earlier this month as the company continues efforts to change its fortunes.
Sir Michael Hill and Daniel Bracken, CEO Michael Hill International, celebrated the business’ 40th anniversary earlier this month as the company continues efforts to change its fortunes.

Michael Hill looks for turnaround, introduces lab-grown diamonds

As it celebrates a milestone anniversary, Michael Hill International has released its financial results for FY19 – revealing the success of its turnaround efforts – as well as its intention to enter the synthetic diamond sector.

This month marks 40 years since New Zealand jeweller Sir Michael Hill opened his first store in the town of Whangarei. But while the champagne may have been flowing to mark the occasion, the company’s most recent financial results are cause for more muted celebration.

Releasing its key financial results to investors, Michael Hill reported that net profits increased to $16.5 million in FY19 – up $14.9 million from FY18. Meanwhile, same-store sales increased 0.7 per cent for the quarter, indicating that momentum is picking up – despite a 3.3 per cent decline for the year.

The biggest driver of sales came from e-commerce, with online purchases increasing by 43.6 per cent. Daniel Bracken, CEO Michael Hill, had previously emphasised the need for an “integrated, customer-led retail-operating model”. This included investing in upgrades to its online store and omni-channel retailing infrastructure.

Daniel Bracken
Daniel Bracken
“It’s the newest thing in the jewellery world and us being the first to market is another demonstration of us making sure we’re completely relevant to the modern consumer”
Daniel Bracken, Michael Hill

Reflecting the changing retail environment, Michael Hill closed 11 stores – including the last of its Emma & Roe outlets – and opened 10 new locations, leaving it with a total of 306 spread across Australia, New Zealand and Canada.

Its underlying pre-tax and interest earnings fell to $34.6 million, impacted by a $6 million write-down of old stock and $4.5 million in remuneration to underpaid staff. It also reduced its $28 million debt to $24.8 million.

Calling FY19 a “transitional year for the company”, Bracken said in the financial report, “I’m proud that we have been able to improve sales momentum despite challenging trade conditions in our key markets. Following our Q4 sales results, I’m confident that in the coming year we are well-positioned to deliver improved performance as our new operating model gathers pace.”

Bracken, who joined the company in November 2018 from Specialty Fashion Group, also pointed to reducing head office costs – 27 staff members were sacked in April – and a renewed focus on branded collections as part of the turnaround strategy. Michael Hill plans for branded jewellery to make up 50 per cent of its sales by 2022.

Lab-grown lifeline?

After announcing the financial results, Bracken revealed that Michael Hill has started selling synthetic diamonds at a single Queensland location in order to test consumer demand.

“It’s a new product category and growth opportunity,” the Australian Financial Review quoted Bracken as saying. “It’s the newest thing in the jewellery world and us being the first to market is another demonstration of us making sure we’re completely relevant to the modern consumer.”

Jeweller contacted Michael Hill International for comment on its synthetic diamond pricing structure, where it is sourcing its lab-grown stones, and specifics of the product line. However, a representative for the company was unable to comment at the time as details were still being finalised.

 

More reading:
Michael Hill underpaid staff by up to $25 million
Michael Hill sales slump but company shows signs of improvement
Michael Hill fined for misleading warranties
Michael Hill closes remaining Emma & Roe stores

 











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