Challenging Retail Market Hits Michael Hill Sales

RAPAPORT... Revenue at Michael Hill fell in the last fiscal year amid a difficultretail environment and the company's shift away from its previous discountingstrategy. Group revenue at the Australia-based jeweler fell 1% to AUD569.5 million ($386.2 million) for the year ending June 30. Same-storesales - at branches open more than a year - slipped 3.3% to AUD 524.7 million($355.8 million), the company said last week. Revenue in Australia slid 3.7% to AUD 313.6 million ($212.6million), as the company moved away from its previous discounting strategy, which had a dampening short-term effect on consumers' willingness to buy goods. Michael Hill also noted challenging andcompetitive conditions in the country's retail market. "We have been able to improve sales momentum despitechallenging trading conditions in our key markets," said Michael Hill CEODaniel Bracken. "Following our fourth-quarter sales results, I'm confident thatin the coming year we are well positioned to deliver improved performance." Sales in New Zealand declined 4.1% to NZD 120.1 million ($77.1million), while Canada proved to be the company's strongest performer, withrevenue increasing 1.8% to CAD 133.1 million ($100.4 million). Meanwhile,e-commerce sales for the year increased 44% to AUD 16 million ($10.8 million).Profit was AUD 16.5 million ($11.2 million), compared with AUD 1.6 million ($1.1million) the previous year. Michael Hill had initially reported a profit of AUD4.6 million ($3.1 million) for fiscal 2018, but later adjusted the figure toaccount for compensation it paid its retail employees in Australia, afterdiscovering it had been underpaying them. Michael Hill operated 306 stores at the end of the fiscalyear. It closed five of its six remaining Emma & Roe stores during theperiod. "Whilst we expect market conditions to remain challenging,our focus will be on strengthening our customer proposition with new brandedproduct and improved disciplines in buying, selling and marketing," Brackenadded. Image: A Michael Hill store. (Michael Hill)