Jewellery group Michael Hill closes Australian stores and sacks manager roles

$30-33m profit in first half of 2023-24 forecastedStores in NSW, Vic, Qld and WA affectedREAD MORE: US pizza and arcade chain expands Down Under

A well-known jewellery retailer has announced major managerial hierarchy and store cutbacks after profits plummeted.

Jewellery group Michael Hill blamed tough retail conditions and ‘aggressive’ competitor behaviour on its shock decision to axe senior managers and close six stores in its latest trading update released on Friday.

The New Zealand founded company forecasted a $30-33million profit in the first half of the 2023-24 financial year, well below the $54.5m recorded for the same period 12 months prior.

This is despite a 4.1 per cent increase in sales to $362.8m across the group over the same period.

Five under-performing Michael Hill stores have shut down in Australia in the last six months, along with another in Canada.

Jewellery group Michael Hill has closed five stores in Australia and slashed a ‘number’ of senior management roles after profits for the first half of 2023-24 plummeted

Affected stores included two in NSW and one each in Victoria, Queensland and regional WA.

A ‘number’ of senior management roles were slashed to reduce operating costs.

The company hasn’t revealed how many jobs were lost.

‘Clearly margin was under pressure from both input costs and promotional activity, and inflationary forces saw elevated costs across many aspects of the business, which together impacted (earnings before interest and taxes) for the half,’ managing director Daniel Bracken said.

‘While the first half was definitely a challenging period for our business with sales for the core Michael Hill brand down, we are encouraged by our performance against the broader jewellery sector.

‘Even though consumers continue to monitor their discretionary spend, our multi-brand strategy puts us in a strong position to continue taking market share from our competitors as we expand the Bevilles network and elevate the Michael Hill brand.’

The jewellery retailer was founded in New Zealand 45 years ago by Michael Hill (pictured with his daughter Emma)

Declining consumer demand and the soaring costs of gold and diamonds were also factors.

‘The macroeconomic environment impacting consumer sentiment resulted in difficult trading conditions, while both inflated input costs and aggressive competitor behaviour also placed margin under pressure,’ the company stated.

The first-ever Michael Hill store opened at Whangarei in New Zealand’s far north in 1979.

Eight years later, the company was listed on the New Zealand stock exchange and expanded its footprint to Australia.

Founder Michael Hill stepped down as company chairman in late 2015 to make way for daughter Emma.

Waning consumer demand and the soaring costs of gold and diamonds have contributed to the jewellery retailer’s declining profits

The company currently has 272 Michael Hill stores across Australia, New Zealand and Canada.

The group also has 26 Bevilles stores after it acquired the Australian jewellery chain for $45m last April. An additional four Bevilles stores have since opened.

The Michael Hill group recently launched its high-end jewellery brand TenSevenSeven online with the first store due to open in the coming months.

The brand has also teamed up with Aussie rock band INXS for a new jewellery collaboration inspired by two of the band’s biggest tracks – ‘By My Side’ and ‘Never Tear Us Apart’.

Michael Hill has almost 300 stores across New Zealand, Australia and Canada