Online Growth Boosts Michael Hill Sales

RAPAPORT… Revenue at Michael Hill grew 4.4% year on year to AUD 329.5 million ($216.7 million) in the Australian jeweler’s first fiscal half, as investments in digital platforms paid off.

Same-store sales — at retail locations open for at least a year — rose 6.3% for the six months ending December 29, reflecting increases across its network in Australia, New Zealand and Canada. Net profit climbed 20% to AUD 21.4 million ($14.1 million), the company reported Tuesday.

The retailer benefited from a new online loyalty program and improvements to the user experience of its website, which helped drive a 44% jump in e-commerce sales for the period. It also recorded solid sales and profit margins from its freshly launched offering of laboratory-grown diamonds, and plans to expand the product to more stores in the coming year, Michael Hill CEO Daniel Bracken noted in a call with investors.

“The result reflects the momentum we have built, and is an early validation of both the strategy and the new management team,” said Bracken, who joined the jeweler in November 2018. He pointed to the importance of product newness and focusing on costs as a way of insulating the business from external difficulties.

“We are still experiencing a highly competitive jewelry segment, particularly in Australia, as our competitors continue with deep discounting strategies in order to achieve sales,” Bracken explained. “Given the backdrop of challenging trading conditions in retail, and in particular, jewelry, we feel proud of the results that we have achieved.”

The Australian bushfires and the coronavirus have only had a limited effect on Michael Hill and its supply chain so far, but it’s difficult to predict how these situations will play out, the executive added.



Image: A Michael Hill store in Bourke Street Mall, Melbourne. (Shutterstock)