Michael Hill beaten by US market

Jewellery manufacturer and retailer Michael Hill is pulling out of the United States following months of declining sales.

The company reported a 10 per cent drop in sales in the US for the six months to December 31, 2017.

Yesterday, Michael Hill International chief executive Phil Taylor said that since launching in the US in 2008, Michael Hill’s US business had struggled to provide a return, despite ‘‘significant investment’’.

‘‘Our time in the highly competitive US jewellery market taught us a lot and helped to strengthen our core business …

‘‘However, our US operations have not gained sufficient traction in recent years and the level of capital required to scale up the business is not warranted under current trading conditions.’’

The company has nine stores, across three states, in the US.

It is unclear how many people will lose their jobs as a result of the closures. However, Taylor said the company was committed to supporting employees. This would include seeking opportunities for redeployment where ‘‘reasonably possible’’, he said.

The stores will continue to operate until the company negotiates, and completes, its exit strategy.

Earlier this month, Taylor said the US market was ‘‘difficult’’ and the fine jewellery sector was not performing well.

Sales in the US had been declining over the past 18 months, and the company had ‘‘hit a wall’’.

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, with 317 Michael Hill stores in Australia, New Zealand, Canada and the US, and 30 Emma & Roe stores in Australia and New Zealand.