Michael Hill reins in sales slowdown

Jewellery retailer Michael Hill’s revised operating model is showing some encouraging signs, with sales falling at a slower rate in the March quarter compared to prior periods.

Over the three months to March 31, 2019, total sales fell by 0.8 per cent to $117.5 million, and same-store sales fell by 1.5 per cent to $110 million.

When compared to the 11 per cent decrease in same-store sales in Q1, and 2.9 per cent fall in Q2, Q3 suggests the jewellery retailer’s operations are stabilising.

“We are particularly encouraged by the early results achieved from our new integrated customer-led retail operating model, which was introduced in March and saw some same store sales growth for the month,” Daniel Bracken, Michael Hill International chief executive,  said.

The business indicated it would shift its business model toward a “more sophisticated and integrated” customer-led experience in February, in order to better personalise the shopping experience for its customers.

“We have already seen the potential for the new integrated model to lift customer engagement and sales, as well as improve operational efficiencies,” Bracken said.

“This is an exciting time for the company as we continue to deliver on our strategic initiatives and make fundamental improvements to the way we operate.”

Michael Hill’s same-store sales in Australia fell 3.4 per cent in the quarter, with conditions remaining challenging for retailers, to $61.8 million – compared to the $64 million seen in the same period of 2018.

While one store was opened during the period, three were closed. The retailer ending the period with 71 stores trading.

In New Zealand, same-store sales fell 6.3 per cent to NZ$24.73 million ($23,42 million), with the end of March seeing an overall slowdown in consumer sentiment and spending in the region. One store was closed, leaving a total of 52 stores trading across New Zealand.

E-commerce sales over the period contributed 2.9 per cent, or $12.5 million, of the business’s total sales over the nine-month period to March 31, 2019. This reflects a 53 per cent increase on the same nine-month period the previous year.

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