Michael Hill closing 9 stores globally, 3 in NZ, forecasts further closures.

Coronavirus took a toll on Michael Hill International that said it’s closing nine stores this morning, three of which are in New Zealand. The business has posted an article on the NZX Limited describing the market effects of the pandemic.

“The group has agreed that it will not re-open some underperforming shops in all three regions, to date, five in Australia, three in New Zealand and one in Canada. More shop closures are likely in all markets, depending on store results and the result of landlord negotiations,” it said.

The location of the three New Zealand stores has not been announced but Michael Hill has an outlet in the hard-hit Queenstown on Rees St and this morning those on the market were asking if that store will stay open.

But First Retail Group’s Chris Wilkinson did not think Queenstown should close. “I think it’s going to be stored where there’s a gap-there may be a lease expiry ahead or sites in older centers or malls without a potentially profitable future. It’s not going to be Queenstown as it acts as a branding element for the Australian and New Zealand market. Queenstown has several stores that have a dual role both as brand ambassadors and retail outlets,” Wilkinson said.

Alternatively, the company could close down stores in smaller regional areas. A company spokesperson today said from Australia: “We still haven’t protected all the workers involved and we’re hoping to be able to redeploy the vast majority of them, but we don’t want to say where the stores are until we’ve done that.”

Michael Hill International said that by the end of March, “all 301 stores worldwide had temporarily suspended operations. We were aggressively preparing the reopening of our store network and considerable attention was given to re-evaluating the retail network, demographic consumer, and profitability business. We are committed to open the right stores with the right product at the right time.”

Quick 100 Australian shops and 25 New Zealand stores will be open from tomorrow. The rest of the stores in Australia and New Zealand will re-open slowly in the coming month. Plans are underway to start opening the Canadian stores slowly from late this month, the company said.

But the retailing market was hit hard “Because of the volatility of the economic environment, the organization also anticipates a continuing effect on sales and profitability. Therefore, we have been negotiating with all our landlords to achieve fair contractual agreements that represent the realities of the customer marketplace and trade conditions,” it said today.

Stores have stickers on the floor to ensure social space, more contactless payments are used, perspex windows are up, items are being constantly washed and workers are being educated in new safety procedures.

But there was a bright spot: over the last three weeks, the business has had a significant increase in online revenue, surpassing last year’s previous best week from Christmas, it said.

“We took the opportunity over the seven-week shop closure period to introduce a range of key digital initiatives and developed new strategies to expand our business and meet the needs of our changing customers,” it said.

CEO Daniel Bracken had surgery and will need a reduced workload for the next few weeks. In the meantime, the board had agreed not to recommend an acting CEO.

ThankYou!