Michael Hill. Photo / Herald on Sunday
Jewellery company Michael Hill International is to close eight of its stores in the United States, leaving it with nine US stores, all within the greater Chicago area.
Michael Hill acquired 17 stores in July 2008 from Whitehall Jewelers which had filed for Chapter 11 bankruptcy protection.
The 17 stores
acquired were mainly based around the greater Chicago area with three stores further south in and around St Louis.
Company chairman Michael Hill today said that for the past 20 months the company had tested its retail concept in the US market, in the face of some of the harshest retail and economic conditions in recent history.
The decision to consolidate to a smaller platform of nine stores was made after a full review of the business, including results as well as operational and real estate issues, Hill said.
The nine stores would immediately be refurbished to bring them up to the company's latest global concept.
"This group of stores will then give the company the best possible platform and opportunity to position the brand in the US," said Hill.
"The board remains positive about the US market and is aiming to position the brand to take full advantage of the financial recovery over the coming years."
Michael Hill International expected operating losses in the US of around US$6 million ($9.1m) for the 2009/10 financial year, excluding costs associated with the store rationalisation. The cost of closing the eight stores would be about US$$1.8m.
Due to the initiatives announced today, US losses should be reduced in the 2010/11 year, Hill said.
The rationalisation of the US business would not affect other parts of the company, with plans to open up to 15 new stores in other markets in the coming year.
- NZPA
