The ASX-listed Australian jeweller Michael Hill International is closing 24 of its 30 Emma & Roe stores to focus on the demi-fine jewellery segment.
One-off cash costs for lease terminations and employee severance are estimated to be between $5.8 million and $7.9 million. The company is now negotiating with landlords.
The company reported a 5.4% fall in Emma & Roe same store sales for the half year to December. Overall Michael Hill operating revenue increased by 4.5% to $342.2 million.
A business review of the underperforming Emma & Roe stores 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,” says the company.
“The demi-fine segment allows customers with a preference for fine jewellery to achieve their desired look but at a lower price.
“The company considers that the six store footprint will provide the opportunity to iterate the new model at speed based on customer insights and operating experience.”
The Brisbane-based company also announced in January it was getting out of its loss-making retail operations in the US. The 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 31 December 2017, the Group had 347 stores globally.
The company raised $440.6 million when it floated on the ASX in 2016 at $1.15 a share. They last traded at $1.08.