ASX-listed jewellery seller Michael Hill has become the first major Australian retailer to close its doors in light of the coronavirus pandemic, putting the jobs of thousands of workers at risk.
In a statement to investors on Tuesday morning, Michael Hill said it had been monitoring the effect of COVID-19 on its key trading markets, which include Australia, Canada and New Zealand.
The government’s new strict social distancing guidelines, which require four square metres to be provided per person in any enclosed space, were “not consistent with the day-to-day conduct of our business”, the retailer said.
“The drop off in trade the company has experienced in Australia also reflects a customer base that is, of course, focused on more immediate issues,” it said.
Retailers around the country have seen a massive reduction in trade in recent weeks, with the hardest hit being in the discretionary sector. Some executives have reported sales reductions of as much as 50 per cent.
Due to this, Michael Hill said it would close its 165 Australian stores immediately, and for an indefinite period of time. Stores in New Zealand will also be shut immediately, as the country moves into full lockdown.
The company’s Canadian stores had already been shut down on March 20, and will now continue to be shut indefinitely. Its online store will continue to operate.
Michael Hill employs around 2500 staff members across its 300 stores globally, who will now be stood down with access to leave entitlements and directed to access unemployment schemes such as Newstart.
“The board and management team have acted swiftly today following the extraordinary circumstances that are impacting the Australian and New Zealand retail markets,” company chair Emma Hill said.
“Whilst it is clear that the suspension of our store networks is necessary for the safety and wellbeing of our people and our customers – we know also that this will be a time of great uncertainty for them too, and we are doing our best to provide them with the support that they need through this difficult time.”
Michael Hill will take a range of “urgent” measures to preserve cashflow including suspending its 1.5 cent dividend, which was set to be paid on Friday, for six months. The business will also look to cut staff at its support centre in order to reduce costs.
This story originally appeared in the Sydney Morning Herald. Read the original story here.
Business Insider Emails & Alerts
Site highlights each day to your inbox.