Michael Hill finds US mar­ket tough go­ing

The Timaru Herald - - CATALYST - CHLOE WIN­TER

As the song goes, di­a­monds are a girl’s best friend.

How­ever, this doesn’t seem to be ring­ing true for Michael Hill’s United States cus­tomers, as it strug­gles to gain trac­tion in one of the big­gest mar­kets in the world.

The New Zealand jewellery man­u­fac­turer has re­ported a 10 per cent de­cline in sales in the US for the six months to De­cem­ber 31, 2017.

Michael Hill chief ex­ec­u­tive Phil Tay­lor said the US mar­ket was ‘‘dif­fi­cult’’ and the fine-jewellery sec­tor was not per­form­ing well.

While no de­ci­sion had been made to with­draw from the US mar­ket, the com­pany’s per­for­mance there was an ‘‘on­go­ing topic of dis­cus­sion by man­age­ment and the board’’, Tay­lor said.

‘‘For us, it is es­pe­cially chal­leng­ing at such a small scale with only nine stores, across three states.

‘‘Our proven re­tail model that has served us well in New Zealand, Aus­tralia and Canada has re­lied on achiev­ing scale, and, in par­tic­u­lar, with our mar­ket­ing ac­tiv­ity. This has been very dif­fi­cult to repli­cate in the US.’’

Sales in the US had been de­clin­ing over the past 18 months, Tay­lor said.

‘‘Good progress was made on the US busi­ness post-GFC from 2010 through to 2016, but we have hit the wall in gain­ing fur­ther trac­tion on top-line sales since that time.’’

De­spite the com­pany’s strug­gles in the US, Canada was per­form­ing well, with seven new stores open­ing, and sales in­creas­ing by 4.8 per cent, for the six months to De­cem­ber last year.

In ad­di­tion, its New Zealand busi­ness also saw sales in­crease by 3.4 per cent dur­ing the same pe­riod, while Australian store sales were flat for the half year.

The com­pany said the pace of fur­ther store open­ings around the world would be dic­tated by the avail­abil­ity of suit­able locations and ‘‘sat­is­fac­tory’’ lease terms.

Michael Hill In­ter­na­tional was founded by Sir Michael Hill in 1979 when he opened his first jewellery store in Whangarei.

The group has 347 stores glob­ally, in­clud­ing 317 Michael Hill stores in Aus­tralia, New Zealand, Canada and the US, and 30 Emma & Roe stores in Aus­tralia and New Zealand.

The group’s global head­quar­ters, in­clud­ing its whole­sale and man­u­fac­tur­ing di­vi­sions, are in Bris­bane.

PHOTO: MYTCHALL BRANSGROVE/STUFF

Sales are up in Michael Hill’s New Zealand divi­sion.

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