Former Air New Zealand chief executive Rob Fyfe has taken advantage of Michael Hill's recent share price slump, buying 700,000 shares following last week's disappointing sales result.

Fyfe is an independent director of Michael Hill and last year agreed to a two-year consultancy role to mentor then chief executive Phil Taylor, who has since resigned for health reasons and will step down next month.

Michael Hill is having a difficult period, shutting its poor-performing US stores and moving away from discount pricing. Last week, the company reported an 8.8 per cent slide in September quarter sales to AU$112.2 million ($121.7m) with New Zealand same-store sales down 7.6 per cent.

The shares sank 24 per cent to 74c and are down 42 per cent over the past 12 months.

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A notice to the NZX reveals Monkey Trustee acquired 700,000 Michael Hill shares for $504,000 on October 18. Monkey Trustee acts on behalf of The Black Leopard Trust for the benefit of Fyfe and his family.

Another Michael Hill director, Gary Smith, also topped up his holding, last week buying 50,000 shares for $33,286, according to NZX disclosures.

Michael Hill is transforming its business after ditching a decade-long attempt to crack the US market and winding up its Emma & Roe sub-brand in Australia.

In a trading update last week Taylor said the group remained focused on repositioning Michael Hill from being a traditional retailer to a differentiated omni-channel brand.

"We expect the results of our renewed strategy to be progressively realised over this and following years," he said.

The company says it has seen improved results from an e-commerce strategy with online revenues increasing by 84.9 per cent during the quarter and Taylor says it's a channel that Michael Hill is focusing on.

FNZC analyst Andrew Steele expects Michael Hill to generate a net profit of AU$29.3m for the year to June 30, down from a previous forecast of AU$36.3m.

Steele also cut his target price for the stock to $1.01 from a previous target of $1.35 due to the lower earnings forecast.

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