Michael Hill closes 300 stores
Iconic jewellery chain Michael Hill has taken the extraordinary step of closing 300 shops around the globe as a result of the escalating COVID-19 crisis.
In a statement issued to investors this morning, the ASX-listed company revealed it was taking drastic measures as a direct result of the coronavirus pandemic, which has devastated sales.
"In Australia, the current 'social distancing' guidelines are not consistent with the day-to-day conduct of our business," the statement reads.
"The drop off in trade the company has experienced in Australia also reflects a customer base that is of course focused on more immediate issues.
"In the interests of the health and safety of our people and our customers, Michael Hill today announces that it will suspend operations of its Australian store network for an indefinite period with immediate effect."
Founded by New Zealander Michael Hill in the 1970s, the popular jewellery chain now has more than 300 stores across Australia, New Zealand and Canada.
But today it was also revealed the company's New Zealand stores were also "suspended indefinitely with immediate effect", while the Canadian branch had also been indefinitely suspended earlier this month.
However, the company confirmed its e‐commerce business will continue.
"The company is also taking a range of urgent measures to ensure that its costs are reduced to better match its expected revenue," the statement continued.
"In all markets where store operations are being suspended, team members are being stood down with access to leave entitlements while government support schemes are assessed.
"The company is undertaking a review of its corporate support centre with a view to reducing costs and ensuring we have the right mix of roles to support the business in the coming months."
On February 25, the company announced an interim dividend of 1.5c per share, with an ex‐dividend date of March 12, 2020.
As a result of "expected interruptions to trade in all our markets", the board has decided to defer payment of that dividend for six months, with the decision to be reviewed again before September 30.
Chair Emma Hill said the company was supporting employees and customers.
"The Board and management team have acted swiftly today following the extraordinary circumstances that are impacting the Australian and New Zealand retail markets," Ms Hill said.
"Whilst it is clear that the suspension of our store networks is necessary for the safety and wellbeing of our people and our customers - we know also that this will be a time of great uncertainty for them too, and we are doing our best to provide them with the support that they need through this difficult time."
In 1979, Sir Michael Hill and his wife Christine opened their first jewellery store in New Zealand.
Then, in 1987, he floated Michael Hill Jeweller on the New Zealand Stock Exchange, raising enough capital to expand in his home country and also to break into the Aussie market, which he did via four stores in Brisbane later that year.
It went on to expand across both countries as well as Canada, and the business celebrated its 40th birthday last year.
News.com.au contacted Michael Hill for comment.
Originally published as Michael Hill closes 300 stores