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- Jewellery company Michael Hill (MHJ) will begin reopening its stores across Australia, New Zealand and Canada
- Unfortunately, as restrictions in Canada have not yet eased, their stores will be the last to open
- During closures, the company has used the time to improve its digital offerings and customer service
- In the last three weeks, online sales outperformed the prior record digital sales week from Christmas 2019
- Despite improving conditions, Michael Hill will continue keeping an eye on its expenditure
- Michael Hill is down 6.94 per cent and shares are trading for 33.5 cents each
Michael Hill (MHJ) has released a positive update as it actively monitors and manages the impact of COVID-19 on its operations.
Reopening stores
In response to the COVID-19 crisis, the company announced that all 301 stores globally had temporarily suspended operations in late March.
Following a relaxation of Federal Government health requirements, State Governments in Australia have started lifting restrictions. This has led to the jeweller trial the reopening of selected stores with new safety protocols to protect employees and customers.
Pleasingly, Michael Hill plans to reopen all stores by early next month.
On May 11, the New Zealand Government announced the nation will be moving down to stage 2 which allows retail stores to reopen.
The company plans to open 25 stores tomorrow, on May 16 and will progressively open all remaining stores.
Unfortunately, all stores in Canads remain closed. However, plans are in place to slowly reopen stores from later this month, subject to Provincial Government directions and public health requirements.
When Michael Hill does reopen, it will implement thorough cleaning regimes, stickers to ensure social distancing, contactless payments, perspex screens for checkouts, ongoing cleaning of products, and team members will be appropriately trained in the new safety procedures.
Due to underperformance, the jeweller has decided not to reopen some stores across all three segments. So far this includes five in Australia, three in New Zealand and one in Canada. Further store closures are likely across all markets, based on store performance and the outcome of landlord negotiations.
Online sales boost
Michael Hill has experience a major boost in online sales, especially in the last three weeks. In this period alone, online sales outperformed the prior record digital sales week from Christmas 2019.
The company has taken the opportunity to deliver a number of key digital initiatives to grow its business.
During physical store closures, the company launched virtual appointments where customers can book a video appointment with company sales professionals. Michael Hill will be spending the next month testing this service in Australia only, before expansion to other countries.
The company has launched an online video hub that provides customers with the latest information on new product launches, expert advice, styling tips and gift guides.
Additionally it has offered a shoppable Instagram feed with direct links for purchasing and a WeChat Mini Commerce Store connecting a new audience to access and buy products.
Memberships for its Brilliance loyalty program have increased to over 100,000. Loyalty revenue represents 42 per cent of total e-commerce revenue. This marks the highest since launching Brilliance earlier this year.
“We have been quick to respond and harness this opportunity, with the implementation of a number of digital initiatives to continue to attract new customers and maintain the momentum,” CEO Daniel Bracken said.
Cost measures
As announced in April, the company is committed to maintaining a solid financial position and business model.
Michael Hill will continue implementing controlled stand-up of employees, along with access to various government wage support programs; actively engaging with landlords; cancelling or deferring all non-essential planned store capital expenditure; and review inventory levels and types held across all locations.
“I’m witnessing a sense of resilience, determination and purpose from all parts of the business. The next six months and beyond will continue to be challenging, however, we are well-placed in each market to emerge as a strong and more relevant jewellery brand,” Daniel concluded.
Michael Hill is down 6.94 per cent and shares are trading for 33.5 cents each at 1:38 pm AEST.
