Michael Hill to close 24 Emma & Roe stores

Michael Hill to close 24 Emma & Roe stores
Jewellery chain Michael Hill International will close most of its struggling Emma & Roe stores as it moves towards its plan to create a "demi-fine" jewellery market.

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.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Crypto staking: a new way to earn passive income
Partner Content
You may be familiar with traditional ways of earning passive income such as trading sto...
Etoro
Advertisement

Related Stories

‘Devastated’ boss of collapsed Pivotal Homes warns that risk has swung against builders

‘Devastated’ boss of collapsed Pivotal Homes warns that risk has swung against builders

The devastated boss of collapsed Gold Coast homebuilder Pivotal Hom...

St Baker affirms commitment to Novonix as he exits board to focus on new fund

St Baker affirms commitment to Novonix as he exits board to focus on new fund

Rich lister and power industry titan Trevor St Baker, the largest i...

PEXA purchases 25 per cent stake in AI fintech company Elula

PEXA purchases 25 per cent stake in AI fintech company Elula

In a bid to bolster its fintech offering, online property exchange ...

Telus why: $1.2 billion takeover of Appen revoked “without explanation” after just eight hours

Telus why: $1.2 billion takeover of Appen revoked “without explanation” after just eight hours

It took just eight hours for Canadian telco giant Telus to revoke i...