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Michael Hill International (ASX: MHJ) is saying its final goodbyes to the fledgling brand which, despite promise in the early days of Michael Hill's ASX listing, has proven to be a burden on the group's balance sheet.
Following a company-wide review, Michael Hill has decided to close all Emma & Roe fashion jewelry stores to recapitalise and focus on the brand's core luxury assets.
Michael Hill closed the first lot of 24 Emma & Roe stores in March this year but had initially intended to keep six stores trading as part of a project to reposition the brand into demi-fine jewelry.
CEO Phil Taylor says the company's decision to axe Emma & Roe entirely comes from a capital management perspective.
"Following a strategic review we have decided that a singular focus on the Michael Hill brand will best position us to deliver a strong customer proposition and financial results," says Taylor.
"Management resource and capital that would have been required to reposition the Emma & Roe brand will instead be directed to our core business, Michael Hill."
Michael Hill expects a one-off cash expense of $3.1 million from lease termination and employee severance costs.
The company says it will "support its employees", consider "redeployment opportunities" where appropriate and manage redundancy arrangements.
At the half year, Michael Hill's total revenue grew by 4.5 per cent and the previously loss-making Emma & Roe division also recorded revenue growth of 20 per cent.
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