Michael Hill flags more store closures

Thursday, 16 July 2020

Jewellery company Michael Hill is flagging the possibility of more stores closures, although not in New Zealand.

The company told the NZX on Thursday that it was ‘’constantly reassessing our global store network, and monitoring lower foot traffic, which in time could see further store closures’’.

The chain has closed 11 underperforming stores during the June quarter, three in New Zealand, seven in Australia, and one in Canada.

A spokesman said later that no further store closures in New Zealand were anticipated.

**READ MORE:

* Coronavirus: Michael Hill closing three underperforming New Zealand stores

* 'Crisis creates opportunity': Michael Hill flags virus pivot despite sales plunge

* Coronavirus: Michael Hill closing Canadian stores for two weeks as the coronavirus impacts sales

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Chief executive Daniel Bracken said that the company had taken the opportunity during the height of the coronavirus pandemic to reshape the business, particularly around digital sales.

A restructure, including at its support office, had ‘’sadly resulted in a number of non-customer facing team members departing the business.‘’

Rental abatements and rent deferrals had been negotiated with many landlords and they continued, he added.

Reporting its fourth quarter results, Michael Hill said its Canadian operation had taken longer to catch up, with many retailers there not reopening until the start of July.

In Victoria, the company had temporarily closed seven stores because of the recent state resurgence of Covid-19.

Bracken acknowledged there would be further economic uncertainty, and the company was moving to address its risks and costs.

But ‘’having said this, the company has experienced a solid start to the 2021 financial year, with all markets and channels ahead of prior year”.

The reopening of stores had seen ‘’very pleasing’’ sales despite lower foot traffic, and online sales had jumped 193 per cent with margins growing even faster.

For the full year, adjusted same store sales were up by 2.7 per cent, although it was down almost 14 per cent if the closed stores were included.