Jewellery retailer Michael Hill will expand its Emma & Roe brand after a successful trial and move into growth mode effective July this year.
The group said 12 new stores are planned for 2016 to 17, which will be opened in Queensland and NSW. This number could grow to 20 stores in coming years depending on the ‘availability of quality sites on acceptable commercial terms.’
“We are building a strong online presence for Emma & Roe in Australia and this will follow into our other markets as the E&R stores are established,” said Mike Parsell, CEO of Michael Hill.
The jewellery retailer stated it sees potential for at least 300 Emma & Roe stores in its existing markets of Australia, New Zealand and Canada, a similar number to its Michael Hill brand.
New store ROI is forecast to exceed the group’s ROI hurdle rate from the first full year of trade and grow further as the roll out develops.
“The board is confident that Emma & Roe will play an important and ongoing role in the company’s growth and profitability,” said Parsell.
Parsell said Emma & Roe will deliver strong, profitable growth from consumer segments that complement their existing Michael Hill brand. He added they trialled the brand for two years to assess its potential and fit within the group.
Michael Hill stated the Emma & Roe brand has delivered strong same store revenue growth of 35 per cent for the 11 months to May 2016, and a total sales growth of 87 per cent for the same period.
The brand’s EBIT margin is expected to exceed the Michael Hill stores over time once critical mass has been established in each market.
Michael Hill recently announced it will go ahead with its plans to shift its primary share market listing from the NZX in New Zealand to the ASX. The jewellery retailer made the decision citing that most of its operations are based in Australia, which is also its largest market.
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