Samestore sales up for Michael Hill despite pandemic

AUCKLAND: Michael Hill International says its samestore sales were up 7.3% to $A116.7 million ($NZ125.6 million), and its online sales up 129%, in its first quarter of trade in the 2021 financial year.

The jewellery company was able to increase its sales from $A108.8 million in the same period last year, with its Australian business making the largest portion of sales ($A64.2 million), compared with $A57.1 million a year earlier.

Michael Hill said its digital initiatives were paying off as it experienced a doubledigit decline in its store foot traffic, delivering increased sales and margin growth across all three of its markets.

For the quarter, its digital channels represented 5.3% of total sales, while its branded collections represented 43.3%. It increased its membership base by 80% since June to 260,000 members.

New Zealand samestore sales increased by 4.7% in the quarter, while Australian sales grew by 12.5% and 5.9% in Canada.

Sales from the local business totalled $24.4 million, up from $23.3 million recorded in the quarter last year, while its Canadian sales increased to $32.2 million ($C28.2 million).

The company said it was in a strong financial position with a robust balance sheet.

Daniel Bracken, chief executive of Michael Hill, said the group's focus had shifted from topline sales and market share recovery to a balance of both margin and sales growth, underpinned by its strategic initiatives.

‘‘It is encouraging to see so many of these strategies now flowing through to our results,’’ Mr Bracken said in the company's firstquarter trading update.

‘‘Undoubtedly, the business has been and will continue to be impacted by the Covid19 pandemic, with uncontrollable impacts on our store network, as seen in Melbourne and Auckland, and ongoing lower foot traffic.

‘‘To navigate the impacts of the pandemic, the company has put in place a number of measures — strong health and safety protocols, accelerating virtual selling and tryons and rolling out multiple digital initiatives.’’

Mr Bracken said the group would continue to focus on new opportunities that would ‘‘gather pace through the coming quarter and over the balance of the year’’.

He said ‘‘a continued disciplined fiscal mindset’’ had seen a ‘‘costconscious culture now truly embedded as a key pillar of business performance’’.

‘‘The company is wellpositioned as we enter our allimportant Christmas trading period with a healthy balance sheet and reinvigorated teams in all markets.

‘‘A wellmanaged supply chain, an exciting merchandise offer, and our best ever Christmas marketing campaign provide confidence that we can maintain strong momentum across the most significant quarter of the year.’’

Michael Hill closed 15 underperforming stores and faced temporary closures of 44 stores (28 in Melbourne and 16 in Auckland) due to the further Covid19 restrictions in the quarter, which resulted in all store sales declining by 3.6%. As of the first quarter, the group operated 289 retail stores. — The New Zealand Herald