The new head of the jeweler’s U.S. business talks about how this market is different and just how it plans to compete with Signet
Since 2007, Brett Halliday has overseen the Michael Hill brand in Canada, guiding the brand through a long period of growth. Last month, he was appointed head of North America, so he will now also oversee the brand’s U.S. division, which to date has shown mixed results.
Here, Halliday (pictured) talks with JCK about his company’s future in the United States, the ways this market is different, and just how it plans to compete with Signet.
JCK: How have you found the United States different from your other markets?
Brett Halliday: It is a more transactional business in New Zealand and Australia. In Australia and New Zealand, we sell a lot of silver and watches and earrings—all the gamut of the retail product. In the U.S., it is more heavily geared to bridal.
From an advertising point of view, in New Zealand, Australia, and Canada, we can do a lot of national advertising. We can be on TV all the time. We can do national sponsorships.
JCK: Would you say your results in the United States have been disappointing?
Halliday: Certainly, we would have expected to have had more than 10 stores after this length of time. But then again, we have been in Canada now 14 years, and it’s probably been the last four years that we really turned up. It wasn’t until we reached 35 stores that we really started to make some headway from a marketing point of view. From 35 to now 70, our profits went from $1 million to $10 million last year.
We have made a big impact on the Canadian business. That is what we want to emulate in the U.S. We are looking at getting more traction here. When we do, we will open more stores.
JCK: Signet is the dominant jeweler in the United States, especially in malls. How do you expect to compete with it?
Halliday: Signet now operates the Peoples chain in Canada. When I arrived here, they were the jeweler in Canada. There were a couple of smaller players, like Ben Moss, which just went out of business. So we came here with no stores, and we went head-to-head with Peoples and came out on top. They still have more stores than us, but our stores’ volume on average is in excess of theirs. In a difficult market, we are the only jeweler that is expanding.
I expect the same thing here. It might take a number of years. It is a matter of picking off the right markets and picking off what we do well. Where I will make a difference personally is that I have 25 years in retail. I build strong teams. I train people and develop them. My intention is to the transform the U.S. team into the best jewelry salespeople there can be. We still have a founder whose name is on the door, and we manufacture a lot of the product in-house. People enjoy working for a company where you can ring up the founder and talk to him personally. I don’t like to spend much time in the office. I am on the sales floor most of the week, training salespeople and telling them about the culture.
JCK: But what do you see as your competitive advantages versus Signet?
Halliday: Credit is a big thing. We run an in-house program on credit. That is getting some traction. We want to make sure that our bridal marketing is as good as their offer and then getting that out there with creative marketing. How do you get people in the door when nobody knows you? It took some time in Canada. The first five years, it wasn’t easy.
JCK: You are known for your adventurous marketing. Do you expect to replicate that here?
Halliday: I am just in the job two weeks, so I still need to get my head around that. The things that have worked well for us in Canada are aligning ourselves with the Toronto International Film Festival. We sponsor the Canadian Bachelorette and the Raptors basketball team. Those have been amazing partnerships. I would be interested in pursuing things like that. No decisions have been made, but I would be looking at pursuing people who can support the brand and people who make us a little bit different.
JCK: You now have stores dedicated to your charm brand. Can you see expanding that here?
Halliday: We have a brand, Emma & Roe. [Michael Hill’s daughter] Emma is our chair, and Roe comes from [Michael Hill’s wife] Lady Christine Hill’s maiden name. It competes against Pandora. We have started rolling out stores in Australia and New Zealand, and it has gone from the test phase to a full-fledged rollout. I’d like to bring some stores to Canada and then in the long term roll them out to the U.S. But our main priority is getting the U.S. stores to positive growth.
JCK: Do you still plan to have clusters of stores?
Halliday: In New York we have two stores, and we will look at a few more locations around them. The next cluster hasn’t been finalized. In a market the size of the U.S., we want to have groupings of 10 to 15 stores.
JCK: Do you still see possibly up to 400 stores?
Halliday: We’ll see. We could have 10 clusters of 20 stores. Let’s get to 20 first, and then we’ll get to 200.
JCK: Anything else you want people to know?
Halliday: We are learning a lot from the U.S. that we are taking back to other markets. The learnings from the U.S. have helped to make our Australia and New Zealand stores better. The Michael Hill Designer Bridal collection and Southern Star collection were both created out of the U.S. and Canada. And we have brought them to Australia and New Zealand, and they are going crazy. So we are getting a lot more out of it. That is what people don’t actually see.
It really is an exciting time for us. We have slugged it out for a number of years in the U.S. I’m sure people don’t think we are making any traction and losing money and the word on the street is that it is just a matter of time until we pack up and go home. We are not going anywhere. I can tell you the board and the rest of the organization is so excited about this new opportunity. We see nothing but positives. Everyone is as invested as I am in making this work.
(Photos courtesy of Michael Hill)