Archive | Michael Hill

Michael Hill still lifts revenue in year hit by closures

Jewellery retailer Michael Hill International Ltd increased revenue by 3.3% & same-store sales by 0.4% in a year hit by closures in the US and of its Emma & Roe chain.

The company decided in January to close in the US, where it had 9 Michael Hill stores & 24 of its 30 Emma & Roe stores. The other 5 Emma & Roe stores in Australia and one in New Zealand, at Manukau, will also close.

The company ended 2017 with 347 stores, but by its 30 June balance date it was down to 312 in New Zealand, Australia & Canada, including the 6 still due to close.

Michael Hill same-store sales improved 2.2% in New Zealand and 3.5% in Canada, but declined by 0.9% in Australia.

Ecommerce sales increased by 61.9% to $A11.1 million (the company is now based in Brisbane), representing 1.9% of total group sales.

Figures the company issued yesterday were in a trading update and represented 11 months’ accounting-adjusted sales results plus June preliminary sales figures before final accounting adjustments, and were unaudited.

Earlier stories:
24 June 2018: Michael Hill to close all Emma & Roe stores
15 April 2018: Michael Hill sets US closure date, still reports sales growth
9 February 2018: Michael Hill sees $A25 million cut from store exits
31 January 2018: Hill concedes defeat in US, will reposition second brand
14 January 2018: Michael Hill lifts sales but US concerns continue

Attribution: Company release.

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Michael Hill to close all Emma & Roe stores

Michael Hill International Ltd has decided to close all its 30 Emma & Roe stores instead of keeping 6 open and repositioning the brand towards demi-fine jewellery.

Michael Hill announced its intention to withdraw from the US and review the future of its Emma & Roe chain in January. Only one of the Emma & Roe stores is outside Australia – at Westfield Manukau in Auckland. The company has 53 stores in New Zealand, 172 in Australia, 83 in Canada.

The new decision means focusing on the core Michael Hill brand. But the company also commented in Thursday’s announcement: “The demi-fine market remains a compelling market opportunity to pursue at the right time.”

Chief executive Phil Taylor estimated the total one-off cash cost of the closures wouldn’t exceed $A3.1 million (the ASX- & NZX-listed company is now based in Brisbane).

Earlier stories:
15 April 2018: Michael Hill sets US closure date, still reports sales growth
9 February 2018: Michael Hill sees $A25 million cut from store exits
31 January 2018: Hill concedes defeat in US, will reposition second brand
14 January 2018: Michael Hill lifts sales but US concerns continue

Attribution: Company release.

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Michael Hill sets US closure date, still reports sales growth

Jewellery retailer Michael Hill International Ltd will close all 9 of its US stores around 30 April at an estimated cost of $US4.5 million ($NZ6.1 million).

The company (which is based in Brisbane, hence its main reporting currency is the $A) said on Wednesday it had sought a buyer in parallel with negotiating lease exits, but got no satisfactory offers: “The company has therefore negotiated non-binding in-principle lease exit terms with all US landlords and will now proceed to negotiate binding formal documentation with those landlords.”

The cost estimate covers lease termination & employee severance.

Michael Hill announced its intention to withdraw from the US and review the future of its 30-store Emma & Roe chain in January.

Combined, the US and Emma & Roe represented 11% of stores at the end of 2017, but accounted for only 5% of total annual group revenues and contributed an $A12 million loss before interest & tax.

9-month group update

In a financial update on Thursday, for the 9 months to 31 March, Michael Hill said that despite the US and Emma & Roe problems, it grew same-store revenue by 0.4% to $A429.3 million.

The Michael Hill brand, excluding the US, delivered total store sales growth of 4.9% to $A441.6 million and same-store sales growth of 1.0%. Michael Hill same-store sales improved 3.7% in New Zealand and by 4.1% in Canada, but Australian same-store sales declined by 0.3%.

US same-store sales fell 13.9%, and all-store by 17.7%, to $A10.2 million in both cases.

Emma & Roe same-store sales fell 5.8% to $A9.37 million, but all-store rose 16.3% to $A13.7 million.

The company added 15 Michael Hill stores and one Emma & Roe store, and closed 4 Michael Hill stores, taking the total at 31 March to 344 stores trading at 31 March, made up of 314 Michael Hill stores and 30 Emma & Roe stores. Ecommerce sales increased by 62.8% to $8.2 million, representing 1.8% of total sales for the group.

Earlier stories:
9 February 2018: Michael Hill sees $A25 million cut from store exits
31 January 2018: Hill concedes defeat in US, will reposition second brand
14 January 2018: Michael Hill lifts sales but US concerns continue

Attribution: Company releases.

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Michael Hill sees $A25 million cut from store exits

Jewellery chain owner Michael Hill International Ltd said yesterday it expected the lossmaking exit from its US business and repositioning of the Emma & Roe stores would cut December half-year ebit (earnings before interest & tax) from $A40 million in 2016 to $A15 million.

Chief executive Phil Taylor said: “As the company continues to negotiate with landlords to determine Emma & Roe’s future store footprint and its approach to exiting its operations in the US, it is not yet in a position to provide detail on the timing or final cash costs associated with these closures.

“However, the company believes it is appropriate to provide an update in respect of the accounting treatment & expected ebit (earnings before interest & tax) impact of the closure announcement for the purposes of the 31 December 2017 half-year accounts. Following receipt of management accounts reflecting actual trading results for the half-year to December 2017 and preliminary work regarding its half-year accounts for the 6 months ended 31 December 2017, the company expects to report ebit of about $A15 million in the half-year accounts for the year ended 31 December 2017.

“This includes the impact of the one-off, accounting recognition of the US and Emma & Roe store closures of about $A20 million, as determined in accordance with applicable accounting standards. This compares to a prior year ebit result for the half-year to 31 December 2016 of $A40 million. The key contributing factors were the deterioration in the performance of the US and Emma & Roe businesses….

“Despite the one-off accounting impacts from store closures, the decisive actions taken to reduce the Emma & Roe store footprint and exit the US are critical to strengthening the foundations of Michael Hill International as we focus on building significant long-term value in our core businesses across Australia, New Zealand & Canada.”

Michael Hill, based in Brisbane and listed on both the ASX & NZX, will release its half-year results on 22 February.

The company ended 2017 with 347 stores – 317 Michael Hill, 30 Emma & Roe. Only one of the Emma & Roe stores is outside Australia – at Westfield Manukau in Auckland. It has 53 stores in New Zealand, 172 in Australia, 83 in Canada, and will close its 9 stores in the US.

Earlier story:
31 January 2018: Hill concedes defeat in US, will reposition second brand

Attribution: Company release.

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Hill concedes defeat in US, will reposition second brand

Jewellery retailer Michael Hill International Ltd conceded defeat last week for its 9-store US business, but will continue to look for a niche for its 30-store Emma & Roe brand.

10 days after admitting, in a Christmas season update, the future looked bleak for the US and the Emma & Roe brand, chief executive Phil Taylor said the company would negotiate exits from its US operations and reposition Emma & Roe, targeting opportunities in the emerging demi-fine jewellery segment.

The company ended 2017 with 347 stores – 317 Michael Hill, 30 Emma & Roe. Only one of the Emma & Roe stores is outside Australia – at Westfield Manukau in Auckland. It has 53 stores in New Zealand, 172 in Australia, 83 in Canada.

In the Christmas trading update, Mr Taylor said sales under the Michael Hill brand grew 4.3% and same-store sales grew 0.7% – 3.4% in New Zealand, 4.8% in Canada, flat in Australia, down 10% & lossmaking in the US. Emma & Roe grew sales by 20.1%, but same-store sales fell 5.4%.

Combined, the US and Emma & Roe represented 11% of stores at the end of 2017, but accounted for only 5% of total annual group revenues and contributed an $A12 million loss before interest & tax.

Demi-fine proposition for Emma & Roe

On Emma & Roe, Mr Taylor said last week the intention was to chase a new brand proposition aimed at capitalising on the emerging demi-fine jewellery segment & rising popularity of fine fashion. This includes an increased strategic emphasis on omni-channel and a material reduction in store numbers as part of a ‘test & trial’ period for the repositioned brand.

“The company will assess the viability of its 30 Emma & Roe stores, in conjunction with landlord negotiations, to determine the final store portfolio to trial the repositioned brand. The company currently expects this assessment to be completed by the end of February.

“The company has undertaken a comprehensive review of Emma & Roe to help shape the future strategic direction of the brand. The findings of this review identified a major opportunity in the demi-fine jewellery segment and an emergence in customer preferences towards fine fashion.

“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. By bridging the gap between these 2 categories, it allows customers with a preference for fine jewellery to achieve their desired look but at a lower price.

“The company intends to reposition Emma & Roe to this identified segment in late financial year 2018 & 2019. This will involve further investments in the company’s omni-channel capabilities to provide customers with a seamless cross-channel experience, and marketing initiatives to drive additional e-commerce revenue opportunities. This will be further supported through the revamping of stores to provide an immersive in-store retail experience and to capture the essence of the new brand positioning…

“This approach will commence with a smaller, more concentrated store footprint to allow the company to be more agile in trialling the new concept, adapting its strategy and in managing risk.”

He estimated non-cash writedowns of Emma & Roe store assets at $A7 million.

The US business, launched in 2008, has struggled to provide a return despite significant investment into developing a viable business model. Even so, Mr Taylor said helped other parts of the company: “Our time in the highly competitive US jewellery market taught us a lot and helped to strengthen our core business, including the development of our bridal collection strategy and the development of our professional care plan.”

Earlier story:
14 January 2018: Michael Hill lifts sales but US concerns continue

Attribution: Company release.

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Michael Hill lifts sales but US concerns continue

Jewellery retailer Michael Hill International Ltd increased group revenue by 4.7% and same-store sales by 0.5% in the December half-year, but reiterated concern about its US business, where sales fell 10%.

The trading update combines 5 months of accounting-adjusted sales results plus preliminary sales figures for December. The company will deliver its more detailed half-year results on 22 February.

The company opened 14 Michael Hill stores & one Emma & Roe store during the half-year, taking the total to 347 – 317 Michael Hill, 30 Emma & Roe.

7 of the new stores are in Canada, taking the total there to 83, and 6 opened in Australia, taking the total there to 172. The company added one store in New Zealand for a total 53, and has 9 in the US.

Sales under the Michael Hill brand grew 4.3% and same-store sales grew 0.7% – 3.4% in New Zealand, 4.8% in Canada, flat in Australia, down 10% in the US.

Emma & Roe grew sales by 20.1%, but same-store sales fell 5.4%.

Total sales for the group, now based in Brisbane, were $A341.5 million ($A326 million for the December 2016 half) – Michael Hill $A331 million ($A317.3 million), Emma & Roe $10.5 million ($A8.75 million). E-commerce sales grew by 71% to $A5.6 million.

Chief executive Phil Taylor said the company was in the final stages of its comprehensive brand review, a management review of the findings.

Attribution: Company release.

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Propbd on Q F8Jan16 – Michael Hill sales and maybe ASX listing, Summerset sales

Michael Hill lifts sales across board
Jeweller considers ASX listing
Summerset lifts sales

10am:
Michael Hill lifts sales across board

Jewellery retailer Michael Hill International Ltd lifted same-store sales by 4.8% in $A in the second half of 2015.

The company said same-store sales in local currency rose 6.1% in New Zealand, Australia 2.6%, Canada 5.2%, the US 1%.

Overall half-year sales for all stores in local currency (2014 in brackets) were: NZ $67.1 million ($63.2 million), up 6.1%, Australia $174.4 million ($168.5 million), up 3.5%, Canada $53.1 million ($44.9 million), up 18.4%, US $7.4 million ($5.9 million), up 25.1%.

The new Emma & Rose brand’s sales in Australia & New Zealand rose 89.4% to $A4.6 million ($A2.4 million). In New Zealand only, the rise was 266% to $393,200 ($107,500).

Jeweller considers ASX listing

Michael Hill International Ltd also said today its board was considering an ASX listing. The chair, Emma Hill, said 60% of its stores were in Australia, generating 64% of group ebit, Chief executive Mike Parsell said: “Over the past decade we have progressively migrated the majority of our key functions to Australia, including the global support centre, wholesale & manufacturing divisions & executive team. The intellectual property in our retail systems was transferred to Australia in 2008 and in the 2014 financial year the group moved to report in Australian currency as required by international financial reporting standards.”

Summerset lifts sales

Retirement village developer & operator Summerset Group Holdings Ltd achieved 146 sales in the December quarter – 90 new, 56 resales.

Chief executive Julian Cook said the new sales were a high for the year, while resales were slightly below previous quarter results. The company lifted total sales of occupation rights for the year from 458 in 2014 to 578 – new sales up from 286 to 333, resales up from 172 to 245.

Mr Cook said a driver of the strong demand was the continuing development at a number of villages. More resale units had also become available.

Attribution: Company releases.

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Propbd on Q Th23Jan14 – Allied to settle, Jeweller’s NZ sales down, Warehouse recovers

Allied to settle with Speirs next week
3-nation growth for Michael Hill, but NZ down
Strong Christmas helps Warehouse recovery

11.30pm:
Allied to settle with Speirs next week

Allied Farmers Ltd said today all conditions had been satisfied for settlement of a $2 million obligation to Speirs Group Ltd relating to a 2008 put-&-call option contract with Speirs. Settlement is scheduled for Friday 31 January.

Speirs acquires 14% of Allied as part of the deal. The Allied share price when the deal was announced in December was 3.6c. It promptly rose to 4.8c, made it up to 5.3c and was at an even half cent today.

Earlier story, 28 December 2013: Speirs gets 14% of Allied Farmers to settle 2008 deal, plans to re-enter finance sector

3-nation growth for Michael Hill, but NZ down

Michael Hill International Ltd said today it achieved 4.7% same-store growth in the December half (5 months plus preliminary December sales figures) compared to the same period of 2012. Chairman Sir Michael Hill said weakening of the $A against the other 3 currencies it trades in helped the result – the jewellery retailer announced last October it would report all its results in the Australian currency.

In local currency, Michael Hill’s Australian same-stores were up 1.4%, Canada 7.9%, the US 2%, but New Zealand fell 4.1%. Sir Michael said the New Zealand decline was “in part due to the settling in of a new retail management team mid-2013. The company is confident this decline will be reversed in the coming months. The US business performed solidly, finishing 2% up for the 6 months, however trade was adversely affected by severe winter conditions leading into the key Christmas trading period.”

The company will release its full half-year results on Friday 14 February. It’s expecting ebit to come in at $A29-30 million, up from $A28.6 million last year.

Strong Christmas helps Warehouse recovery

The Warehouse Group Ltd said Christmas trading across the group was strong, but wouldn’t fully offset the Red Sheds’ first-quarter margin issues.

Group chief executive Mark Powell said Red Shed sales were expected to be up 4% for the half and total sales up 5%, returning second-quarter gross profit margins to the previous year’s second-quarter levels.

Forecast adjusted group net profit after tax for the December half is $46-48 million, on trading profit down 1-2%.

The Warehouse will release its half-year results & full-year guidance on Friday 7 March.

Attribution: Company releases.

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December-quarter sales lift Michael Hill

Published 9 January 2010

Michael Hill International Ltd rose from a flat September quarter to a 4.4% improvement in same-store sales at the end of the December quarter.

 

The translation to $NZ didn’t help the company’s Canadian & US results, which were much stronger in local currency, although the Canadian same-store performance was still a loss.

 

Chief executive Mike Parsell said yesterday retail conditions were still difficult in North America, although some encouraging trends emerged in the second quarter.

 

As well as the same-store lift, all-store sales rose by 7.9% for the half-year. The sales figures are based on 5 months sales-adjusted plus preliminary figures for December, all unaudited.

 

In $NZ, same-store sales for the half-year were:

Australia, $153.3 million, up 6.2%NZ, $51.7 million, up 5.4 %Canada, $16.2 million, down 12.6%Total, $221.2 million, up 4.4%.

 

All-store sales in $NZ were:

Australia, $163.4 million, up 8.8%NZ, $52.3 million, up 5.5% Canada, $21.1 million, up 7%US, $7.5 million, up 7%Total, $244.3 million, up 7.9%.

 

Same-store sales in local currency were:

Australia, $C124.4 million, up 3.6%NZ, $51.7 million, up 5.4%Canada, $C12.5 million, down 4.9%

All-store sales in local currency were:

Australia, $A132.6 million, up 16%NZ, $52.3 million, up 5.5%Canada, $C16.3 million, up 16.6%US, $US5.3 million, up 30.9%.

 

Michael Hill International will release its half-year operating results on Thursday 18 February. Want to comment? Go to the forum.

                                                                                              

Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

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Michael Hill opts for cashflow over margin

Published 11 January 2009

Listed jeweller Michael Hill International Ltd opted for sales over margin in December because of economic uncertainty, chairman Michael Hill said on Friday in a trading update for the December half.

 

“December sales targets were difficult to achieve in the tough retail conditions we were facing, especially in New Zealand & Canada. Margins for the group will be significantly lower for the half due to exchange rate deterioration on inventory purchases and also due to the difficult conditions that necessitated us going on “sale” in all markets earlier than normal.

 

“A conscious decision was made to target sales at the expense of margins due to the uncertainties of the current economic climate. Managing inventories & cashflow was seen as a priority.“With lower margins & several one-off costs associated with the US acquisition & internal restructuring, the first-half trading result (excluding restructure tax benefits) will be materially below last year’s record interim result of $19.45 million. The interim result will be released on 20 February.”

 

Same-store sales, in local currency, were up 1.2% in Australia to $A113.7 million, down 9.3% in New Zealand to $48 million, down 10.4% in Canada to $C10.1 million.

 

For all stores, local currency, Australian sales rose 5% to $A125.4 million, New Zealand sales fell 7.6% to $49.6 million, Canadian sales rose 3.9% to $C14 million and the new US division achieved $US4.1 million of sales. Transferred to $NZ, total same-store sales were down 1% to $198.9 million but all-store sales rose 8.7% to $226.9 million.Want to comment? Email [email protected].           

Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

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