Michael Hill Finds No Buyer for Nine U.S. Stores

Michael Hill International has announced that it has not received any “satisfactory offers” for its nine U.S. jewelry stores, so they will all be closed.

In January, it had announced its intention to sell its fleet of nine mall-based stores. Ironically, Michael Hill initially entered the market by purchasing some stores leftover from the 2008 liquidation of Whitehall Jewellers.

All of the stores are scheduled to close at the end of this month. The company has six stores in Illinois, one store in the Mall of America in Minneapolis, and two near New York City.

Michael Hill will incur approximately $5.4 million in expenses to exit the U.S. market, including lease termination and employee severance.

According to a statement, Michael Hill “negotiated nonbinding in-principle lease exit terms with all U.S. landlords and will now proceed to negotiate binding formal documentation with those landlords.”

In its latest financial results, Michael Hill said revenue from its U.S. operation fell 15 percent in local currency in the nine months ended March 30, to hit $7.9 million. Comps fell 11 percent.

At the same time, its sales rose in Michael Hill’s other, better-established markets, including Australia (up 1.7 percent), New Zealand (up 4.3 percent), and Canada (up 17 percent).

The Brisbane, Australia–based company announced its intention to exit the U.S. market after 10 loss-making years in January. Michael Hill CEO Phil Taylor later told JCK that the company finally decided the challenges of a “lack of brand awareness and [mall] foot traffic” were too difficult to overcome.

The U.S. business “has struggled to provide a return for the group despite significant investment into developing a viable business model,” said a company statement.

The company first entered the market in 2008. At one point, the company had 17 stores in the United States, and its former CEO had envisioned an eventual fleet of 800 retailers.

(Image courtesy of Michael Hill Jeweler)

JCK News Director