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Challenging Retail Market Hits Michael Hill Sales
Aug 19, 2019 9:11 AM
By Rapaport News
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RAPAPORT... Revenue at Michael Hill fell in the last fiscal year amid a difficult
retail environment and the company’s move away from discounting prices.
Group revenue at the Australia-based jeweler fell 1% to AUD
569.5 million ($386.2 million) for the year ending June 30. Same-store
sales — at branches open more than a year — slipped 3.3% to AUD 524.7 million
($355.8 million), the company said last week.
Revenue in Australia slid 3.7% to AUD 313.6 million ($212.6
million), as the company moved away from its previous discounting strategy, which had a dampening short-term effect on consumers’ willingness to buy goods. The retailer’s previous strategy included continual discounting, which led customers to wait until items were on sale prior to purchasing. At the end of 2018, the company said it would move away from that policy in order to restore the value of its brand. However, in the first four months of the year, customers waiting for sales failed to purchase as many goods, Michael Hill noted. Challenging and
competitive conditions in the country’s retail market also affected sales.
“We have been able to improve sales momentum despite
challenging trading conditions in our key markets,” said Michael Hill CEO
Daniel Bracken. “Following our fourth-quarter sales results, I’m confident that
in the coming year we are well positioned to deliver improved performance.”
Sales in New Zealand declined 4.1% to NZD 120.1 million ($77.1
million), while Canada proved to be the company’s strongest performer, with
revenue increasing 1.8% to CAD 133.1 million ($100.4 million). Meanwhile,
e-commerce sales for the year increased 44% to AUD 16 million ($10.8 million).
Profit was AUD 16.5 million ($11.2 million), compared with AUD 1.6 million ($1.1
million) the previous year. Michael Hill had initially reported a profit of AUD
4.6 million ($3.1 million) for fiscal 2018, but later adjusted the figure to
account for compensation it paid its retail employees in Australia, after
discovering it had been underpaying them.
Michael Hill operated 306 stores at the end of the fiscal
year. It closed five of its six remaining Emma & Roe stores during the
period.
“Whilst we expect market conditions to remain challenging,
our focus will be on strengthening our customer proposition with new branded
product and improved disciplines in buying, selling and marketing,” Bracken
added.
Image: A Michael Hill store. (Michael Hill)
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Tags:
Daniel Bracken, Emma & Roe, Michael Hill, Rapaport News
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