Michael Hill International chief executive Mike Parsell has confirmed plans to move into Britain or the United States, but insists the jewellery firm will do it only after successful expansion in Canada.
Founder Michael Hill - whose family interests hold 47 per cent of the company - foreshadowed
British expansion to shareholders and Parsell confirmed yesterday Britain and the US were being considered.
But Parsell said such moves were some way off. Any move into Britain or the US would have to wait until the Canadian operation was established and making a profit, he said.
Michael Hill International has 16 stores in Canada - in British Columbia and Alberta provinces - and Parsell said the company was close to the necessary economies of scale to make it worthwhile. It was planning another 10 in the next financial year.
"Our first goal is to break even this financial year," Parsell told the Business Herald.
The company has been cautious with its expansion into Canada to avoid spreading itself too thinly.
"It's a matter of good research, finding our niche and having a go," he said.
"The market is very buoyant, which is good, but it means that finding retail locations is very difficult."
After New Zealand and Australia, Parsell said that Michael Hill chose Canada because it was a good stepping stone into the US market.
The only other New Zealand retailer to have pushed into the British and US markets is Pumpkin Patch.
The children's clothing company has overcome difficult trading in Britain and is finding growth easier to manage in the US.
Parsell said that while Pumpkin Patch had reported a good experience, its growth in the US was through wholesaling, an approach that was not available to Michael Hill.
Guy Hallwright, of sharebroker Forsyth Barr, said early indications from Canada were good for Michael Hill but the jury was still out on whether it would be a success.
Part of the problem in Britain was that retailers had to sign long-term leases, making a low-key entry difficult. "I think Michael Hill would find the going much tougher in the UK than they have in Australia or Canada," he said.
Shares in Michael Hill rose 10c to $9.30 yesterday.
