Little price relief for avocado devotees
Michael Hill International is closing its remaining six Emma & Roe stores and its online store, to focus on its core jewellery business.
The listed company announced the news after considering a ‘‘comprehensive strategic review’’ into the trans-Tasman charm jewellery brand.
In March, Michael Hill made a call to close 24 of its Emma & Roe stores, affecting 168 workers, and to ‘‘reposition’’ six remaining stores in the demi-fine jewellery sector.
Yesterday, Michael Hill International chief executive Phil Taylor announced the company would close the rest. He would not say how many employees would be affected by the move.
To date, five stores closed in April, and the others are expected to close by June 30.
New Zealand’s only Emma & Roe store is in Auckland’s Manukau, which will close affecting up to seven staff members.
Taylor defended the closures, saying they would ‘‘best position’’ the company to deliver ‘‘stronger customer proposition and financial results’’. Branching into the demifine jewellery category remained a ‘‘compelling’’ opportunity to pursue ‘‘at the right time’’, he said.
Money set aside to reposition the Emma & Roe brand would instead be invested into the Michael Hill brand, Taylor said.
The cost of closing the remaining six Emma & Roe stores, as well as its online store, is expected to cost about $3.1 million, including terminating leases and paying workers, Taylor said.
The announcement follows news that Michael Hill is pulling out of the United States, after months of declining sales.
Brisbane-based Michael Hill International, which was founded by Sir Michael Hill in Whangarei 39 years ago, also runs Michael Hill stores in Australia, New Zealand and Canada. Avocado addicts who despair about the high prices of their favourite fruit won’t see instant relief.
Supplies of avocados are at their lowest ebb in late autumn and early winter, and the boom-bust nature of growing means prices have gone as high as $6.99 this month.
In 2016-17 the harvest was
7.9 million trays but the volume tumbled last year to only
3.8 million trays. Avocados crop well only every two years.
At present New Zealand imports no avocados but some of the world’s biggest growers – Mexico, Peru and Chile – are sizing up the possibilities of exporting them to New Zealand following the signing of the Comprehensive and Progressive Agreement for TransPacific Partnership (CPTPP) deal.
New Zealand Avocado chief executive Jen Scoular said New Zealand had never been closed to imports but no countries had ever shown an interest because the market was so small.
‘‘New Zealand has just not been on their radar. Mexico needs countries like the United States, which takes 30 times New Zealand’s production.’’
Australia was a larger priority, and Chile had already started talks across the Tasman to gain access.
Exporting countries also have to go through hoops to gain market access. Scoular said it took four years for New Zealand to get permission to export to China, a market that opened up this year.
From February until the export season begins in spring no New Zealand avocados are exported, so the price is not governed by what consumers pay overseas.
About 65 per cent are exported, 25 per cent are consumed by Kiwis, and the remainder is processed.
Most – about 80 per cent – of exports are to Australia, but Asia is increasing its imports of New Zealand fruit.
The executive general manager for T&G in New Zealand, Andrew Keaney, said avocado pricing was determined by supply and demand. T&G is one of the country’s biggest wholesale fruit and vege sellers.
‘‘The reason fruit is expensive now is purely because we are out of season and supply is scarce, with only a small number of shoulderseason growers able to deliver avocados to markets and retailers. Pricing should stabilise in the next two to three months, however, as new-season fruit is picked and makes its way into stores.’’
Demand for avocados had increased significantly over the past five years. As a result avocado growing was ramping up.
The main centres of growing are Northland and the Bay of Plenty. In Northland an estimated
850 hectares of orchards are under way or scheduled for development.
Scoular welcomed them, saying that by 2021 there would be about 20 per cent more land in avocados than today.
She said while people may regard prices as high, they were prepared to pay the same for a cup of coffee, and an avocado had much greater nutritional value.