Michael Hill focuses on cracking tough market

Michael Hill is glad to have a foothold in the US market. Photo / Greg Bowker

If you can make it there, you can make it anywhere.

That's the word from jeweller Michael Hill on the depressed US retail market - a scene Michael Hill International entered just as the worst of the credit crisis hit.

"Our business won't really make it until we learn how to crack the United States," he told a gathering in Auckland yesterday to launch his book, Toughen Up.

When the company first took over the chain of 17 Whitehall Jewellers stores in Illinois and Missouri late last year, some days a store might only get two customers.

That was exceptional, he said, but there was no doubt it was a tough market - 2400 jewellers had gone under in the US since Christmas.

In hindsight it may have been the wrong time to buy Whitehall which had gone into Chapter 11 bankruptcy, but the flipside was that Michael Hill had secured some prime retail sites.

"We would have never, ever have got in there unless there was a downturn." The Kiwi company, with 234 stores in New Zealand, Australia, Canada and now the US, would learn from the Americans, he said.

"If we want to become global we do have to do business in possibly the hardest place there is to do business, and the States really is that."

Becoming a global chain is Michael Hill's next goal. The company is launching two fragrance products next year.

It is not that Michael Hill is passionate about perfume. This was about building a brand, he said. He cited the example of Bulgari fragrances, by the Italian jeweller of the same name.

"It's a big hook and it's a way of getting your name out there ahead of your product. "It's a natural thing to do really if you want to become a brand. And then everything in our shop will become branded ... even the diamonds will [have] lasered on them 'Michael Hill'."

The chain is about to unveil its new-look stores - the first on Wellington's Lambton Quay next month, and then on Queen St in August.

The new format had a subtle, European look, Hill said. The lighting would be "moody" compared with the hard light in the current stores. "It's very brand-building, whereas our present design, it's past its use-by date in my opinion."

Michael Hill was not necessarily going upmarket, but because of the amount of discounting customers did not always appreciate that it manufactured its own products and sold good quality at an affordable price.

"We want to be regarded as the ideal choice, rather than because there's a discount."

The company's same-store sales for the nine months to March were down 8.5 per cent in this country but up 1.1 per cent in Australia.