MICHAEL HILL REVEALS HIGH COST OF EXIT FROM US MARKET
JEWELLERY chain Michael Hill International estimates the closure of its nine lossmaking US stores will cost about $US4.5 million ($6m) in terminated lease agreements and staff severances.
The company, which announced in January that it will exit the US after a decade of losses, says it was unable to find satisfactory offers for its US stores. As a result, it has agreed to non-binding lease exit terms with its US landlords with all nine stores set to close by the end of the month.
The lease termination and employee severance costs have been estimated to be about $US4.5m.
The company has also revealed a further slide in sales revenue from its Michael Hill-branded Australian stores with same store sales down 0.3 per cent in the nine months to March 31 compared to a year ago.
The ASX-listed jeweller’s charm and bracelet brand Emma & Roe’s same store sales for the same ninemonth period dropped 5.8 per cent to $9.4 million.
The jeweller said the closure of 80 per cent of the struggling Emma & Roe stores, which was announced in March, contributed to the weaker sales. Meanwhile, same store sales at its New Zealand and Canadian Michael Hill stores were up 3.7 per cent and 4.1 per cent respectively, while its US same store sales tumbled by almost 14 per cent.
The dual-listed retailer’s shares on the ASX ended trade yesterday steady at $1.12.