Michael Hill has revealed its intent to end US operations, with a further repositioning of its Emma and Roe brand.
US stores will continue to operate as the company negotiates and completes the exit of its US operations.
Michael Hill CEO Phil Taylor indicated that the brand will opt to push for a strong eCommerce strategy following the exit.
“These actions strengthen the foundations of Michael Hill International as we aim to improve the operating performance of our group assets by refocusing capital and resources to those parts of the business delivering the highest returns and potential for growth.
"We see these actions, along with an increased investment on improving the group’s digital capabilities and eCommerce platform, as being the key pillars to driving ongoing sustainable business growth and attracting customers in new and engaging ways."
The Michael Hill brand will continue to have in excess of 300 stores globally once the US store closures are finalised.
The company will assess the viability of its 30 Emma & Roe stores, in conjunction with landlord negotiations, to determine the final store portfolio to trial the repositioned brand.
Michael Hill currently expects this assessment to be completed by the end of February.
In 2016-17, the US retail operations and Emma & Roe business combined, accounted for only 5% of total annual group revenues, while contributing an EBIT loss of approximately A$12 million.
US and Emma & Roe stores comprised 11% of the group’s total retail store network at December 31, 2017.
Taylor said the Emma and Roe brand will now look to corner the demi-fine jewellery segment while investing heavily in a new omnichannel strategy.
“There is great potential in the demi-fine jewellery segment, where consumer desire for stylish affordable jewellery to accessorise their wardrobe is driving increased demand.
"We also see this as being complimentary to our Michael Hill brand as our customers are combining fine jewellery with lower cost demi-fine jewellery and associated accessories.
“This approach will commence with a smaller, more concentrated store footprint to allow the company to be more agile in trialing the new concept, adapting its strategy and in managing risk.
"Therefore, the remainder of FY18 and whole of FY19 will be viewed as a ‘test and trial’ period for Emma & Roe, with operating performance tightly monitored during this period.
“While disappointed with the past results of Emma and Roe, it’s important that the company maintains its vibrant culture of innovation in order to expand its reach and engage with new and emerging customer segments."