Jewellery brand Michael Hill has revealed plans to close 24 of its Emma & Roe bricks-and-mortar stores, following a review into the future of the brand.
In a statement on the Australian Securities Exchange (ASX) and New Zealand Stock Exchange (NZX) on Monday, Michael Hill International Limited said it will reduce the number of Emma & Roe stores across Australia and New Zealand from 30 to six, and will trial this store footprint size up until the end of 2019.
“The company considers that the six store footprint will provide the opportunity to iterate the new model at speed based on customer insights and operating experience,” Michael Hill said.
Michael Hill is just one of several local retailers to reduce its store footprint in 2018, with the likes of Diana Ferrari and Mountain Designs making significant decisions to reduce their number of sites or close bricks-and-mortar stores altogether.
The review undertaken by Michael Hill found there was a “major opportunity” in the new, demi-fine jewellery segment of the market. Demi-fine jewellery refers to accessories that appear stylish and high-end, but are also affordable.
The company said these findings have lead it to reshape the Emma & Roe brand to meet this emerging demand for demi-fine jewellery.
“The demi-fine segment allows customers with a preference for fine jewellery to achieve their desired look but at a lower price,” Michael Hill said in the statement.
Non-binding lease exit terms have been negotiated with the majority of the store’s landlord which will now be further negotiated and eventually made binding.
Affected Emma & Roe employees will be moved to current Michael & Hill stores “where circumstances allow”. The costs of employee severance is expected to be finalised by the end of June, but Michael Hill estimates the total costs of combined lease and employee terminations to be somewhere between $5.8 million and $7.9 million.