Michael Hill starts FY20 at pace
Michael Hill has enjoyed positive sales through the first quarter of FY20, up 11.9 per cent to $121 million, compared to the prior corresponding period which saw first quarter sales drop 8.8 per cent.
This sales improvement was felt across all markets, with same store sales up in Australia (6.8 per cent up), New Zealand (10.1 per cent up), and Canada (16.4 per cent up), giving the jewellery retailer a leg up heading into Christmas.
“These first quarter results are a strong foundation as we enter the all-important Christmas trading period,” Michael Hill chief executive Daniel Bracken said.
“Our new retail model was validated in August, with the deliberate alignment of retail, merchandise, marketing and e-commerce to celebrate the 40th birthday of the Michael Hill brand.
“This led to a notable improvement in our sales for the month of August. Our branded collections played an important part of this collaboration, as we continue to develop and strengthen our unique offerings and heritage brand.”
According to Bracken, the sales uplift in Australia is encouraging considering the generally weak consumer spending seen in the region.
“The Australian market continues to be challenging with widespread discounting in the sector as competitors fight to maintain market share,” Bracken said.
Michael Hill’s most mature market, New Zealand, saw sales grow to NZ$25.4 million over the period, while Canada grew to CAD$27.9 million. Together, these two markets made up more than 40 per cent of the group’s revenue and profit.
Own-brand products made up 37.9 per cent of total product sales, up from the 32.5 per cent seen over FY19, and on the way to the 50 per cent Bracken expects to see in the next two to three years. The increased sell through is a result of a greater in-store execution, and visual merchandising, as well as the introduction of Michael Hill’s bridal collection.
Bracken has previously said that the jewellery business would focus on the fundamentals of retail during FY20, as well as build on the five strategic priorities defined in 2018: omnichannel retail, customer loyalty, branded collections, brand loyalty and achieving operational excellence.
“Our focus will be on strengthening our customer proposition with new branded product and improved disciplines in buying, selling, and marketing,” Bracken said.
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