Jeweller Michael Hill is closing all but six of its 30 Emma & Roe stores
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ASX-listed Australian jeweller Michael Hill International is closing 24 of its 30 Emma & Roe stores to focus on the demi-fine jewellery segment.
Demi-fine is “a relatively new segment of the market combining fine jewellery with fashion for those customers seeking stylish yet affordable items to accessorise their wardrobe”, according to Michael Hill.
The shares rose 4 per cent to $1.12 in early Tuesday trade, valuing the company at about $418 million.
Michael Hill (ASX:MHJ) reported a 5.4 per cent fall in Emma & Roe same-store sales for the December half-year. Overall Michael Hill operating revenue increased by 4.5 per cent to $342.2 million.
One-off cash costs for lease terminations and employee severance are estimated at $5.8 million to $7.9 million. The company is now negotiating with landlords.
A business review of the underperforming Emma & Roe stores identified a major opportunity in the demi-fine jewellery segment and an emergence in customer preferences towards fine fashion.
“The demi-fine segment allows customers with a preference for fine jewellery to achieve their desired look but at a lower price.
“The company considers that the six-store footprint will provide the opportunity to iterate the new model at speed based on customer insights and operating experience.”
The Brisbane-based company also announced in January it was getting out of its loss-making retail operations in the US.
The negotiations for the exit of the nine operating US stores are ongoing with US landlords.
Michael Hill International was founded by Sir Michael Hill in 1979 when he opened his first jewellery store in Whangarei, New Zealand.
The Group had 347 stores globally at the end of last year.
The company raised $440.6 million when it floated on the ASX in 2016 at $1.15 a share.