The Brisbane-based company says it will close 24 of its 30 stores by June 30 at a cost of up to $7.9 million to create a "concentrated store footprint" in the demi-fine segment.
"The company considers that the six-store footprint will provide the opportunity to iterate the new model at speed," Michael Hill says in an ASX statement.
"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.
"The demi-fine segment allows customers with a preference for fine jewellery to achieve their desired look but at a lower price."
Michael Hill says it is now negotiating with landlords to exit its Emma & Roe lease deals and would not say how many people will lose their jobs, although they would redeploy staff or offer redundancy packages.
The total one-off cash cost of closing the stores and paying employee severance is estimated to be between $5.8 million and $7.9 million.
In January, the company released a trading update in which it flagged a major strategic review of its fledgling Emma & Roe brand and indicated that store closures would occur.
The jeweller last month reported a 66 per cent drop in first-half profit to $8.7 million, mainly due to provisions related to Emma & Roe and its exit from the loss-making US market. 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.
At December 31, 2017, the company had 347 stores globally with 317 Michael Hill stores in Australia, New Zealand, Canada and the US, and 30 Emma & Roe stores in Australia and New Zealand.
Michael Hill shares have shed around 20 per cent of their value since January 25 when they traded at $1.31. At around 11.am AEDT, MHJ shares were trading 4 per cent higher at the open at $1.12.
Business News Australia
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