Michael Hill will spend $3m closing its remaining Emma & Roe stores
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Jeweller Michael Hill is set to start negotiating with landlords as it spends $3.1 million closing its six remaining Emma & Roe stores after a strategic review concluded it should eliminate the brand and redeploy capital elsewhere.
The company (ASX:MHJ) announced in March it would close 18 of 24 Emma & Roe stores in a pivot towards the “demi-fine” jewellery market within those shopfronts.
However, management told investors this morning that having completed its promised strategic review of the business, a better use of resources would be to ditch the Emma & Roe brand altogether and focus on strengthening the Michael Hill business.
“The total one-off cash costs of exiting the six remaining Emma & Roe stores for lease termination and employee severance costs is currently estimated to be no more than $3.1 million,” the company said in a statement this morning.
The company will start negotiating with landlords to exit leases and will also shutter the brand’s online store.
Michael Hill is just one of several local Australian retail brands feeling the heat over the past 12 months and its share price has fallen by around 16 per cent since June 2017.
According to ABS retail data, the seasonally adjusted sales trend for clothing, footwear and accessories fell 0.8 per cent in April.
Michael Hill International’s (ASX:MHJ) share price over the past 12 months.
Michael Hill has stores in Australia, New Zealand and Canada. It is also listed on the New Zealand stock exchange.
The brand also had a presence in the US, but it was forced to exit those operations in January after stores contributed to a $US5.6 million ($7.6 million) loss in the first half of 2018, which management deemed not worth the 5 per cent in overall sales the US market contributed to the bottom line.
In the first half of 2018, the company posted a statutory net profit after tax of $8.7 million, down from $25.8 million in the same period during 2017.