Australia’s Michael Hill International plans to buy 17 stores in Illinois and Missouri from Whitehall Jewelers, now in liquidation.
This marks the Brisbane, Australia, company’s first entry into the U.S. market. The company has 188 stores in New Zealand and Australia and 22 stores in Canada. Consensus Advisors, a Boston-based investment firm, is handling the transaction.
Michael Hill will pay $5 million for inventory and leases, or 80 cents on the dollar, for the stores. The majority of the stores are in the Chicago metro area, with two in St Louis. Michael Hill Jeweller CEO Mike Parsell described his chain as “generally mid-range, but with some high-end merchandise as well.” As for buying more stores, he said, “We’ll certainly look at things. But it is in our interest to hold steady with 17 stores. It’s still early days.”
He said tough economic times in the United States gave his company the opportunity to make the acquisition. A company statement said it doesn’t expect the new stores to be profitable for several years.
Michael Hill, publicly listed on the New Zealand stock exchange, is emerging as an industry success story. Last year its profits were up 20.3 percent, even as sales in its home base were flat.
The Michael Hill purchase marks the only stores sold as “going concerns” from Whitehall’s liquidation. Indian company Gitanjali, which owns the Samuels and Rogers chains, is reportedly looking at purchasing up to 100 store leases once the liquidation is finished, which would offer opportunities for continued employment of store personnel.