Markets with Madison: Jeweller Michael Hill’s recession-shielding secret

If jewellery goes out of fashion in a cost of living crisis, Michael Hill International has golden contingencies in place.

“I’m not saying they’ll insulate us against a recession if it comes, but they do put is in a better position than maybe other discretionary retail,” Michael Hill chief executive Daniel Bracken told Markets with Madison.

Bracken said if jewellery designs did not sell, the jewellers can melt the valuable metal down and hold onto it, and reset a stone in a cheaper design.

The company was focused on selling jewellery to consumers celebrating “moments that matter”, such as engagements, birthdays, anniversaries and Christmas - which occurred in any economic environment, Bracken said.

Sales at Michael Hill were booming - up 11 per cent to a record A$363.38 million in the six months to December.

Michael Hill sells jewellery in New Zealand, Australia and Canada. It’s dual-listed on the New Zealand and Australian stock exchanges, with its share priced at NZ$1.10 and A$1.00.

Another dual-listed company, Pushpay, has hit headlines over its plan to go private in a $1.54 billion deal which was ultimately rejected by shareholders on Friday.

Shareholder Nikko Asset Management, which owned 1.4 per cent of the company, voted against the offer but its head of New Zealand equities Stuart Williams said it would be open to a better deal.

Pushpay’s board had until 5pm Tuesday to announce another shareholder meeting, or terminate the deal. The company would update the market by 10am Wednesday.

In October last year, Sixth Street and BGH Capital entered a scheme of arrangement to buy the church donations software company for $1.34 per share, at the lower end of an independent assessor’s valuation range of $1.33 to $1.53 per share.

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Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.