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Covid-19 Dents Michael Hill Sales

Group revenue slumps 61% in fourth quarter ending June 30.
Jul 19, 2020 11:26 AM   By Rapaport News
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RAPAPORT... Australian jeweler Michael Hill reported a sharp drop in revenue during the fourth quarter, as the coronavirus pandemic forced it to shut down most of its stores.

Group sales slumped 61% to AUD 133.1 million ($93.1 million) during the three months that ended June 30, with drops across all markets, the company said last week. Same store sales — at branches open more than a year — fell 4% when comparing the days in which stores were open.

With some 290 locations spread between Australia, New Zealand and Canada by the end of the quarter, the jeweler was forced to close its doors in late March due to the spread of the virus. Although most branches were reopened by the end of May, another outbreak of Covid-19 in Victoria, Australia, earlier this month required the company to reclose a number of locations in the state. Business has improved in other regions since stores returned from lockdown despite lower foot traffic, CEO Daniel Bracken said.

E-commerce partly compensated for the drop in brick-and-mortar activity as Michael Hill’s digital sales jumped 193% during the quarter, delivering some of the highest weeks in the company’s history, it stated.

Group revenue for the full fiscal year declined 14% to AUD 485.7 million ($399.8 million). The company has experienced a solid start to the 2021 financial year, with all markets and channels ahead of the prior year, Bracken noted.

“There is no doubt that economic uncertainty will continue, given future government stimulus packages in all markets remain unclear, and ongoing volatility in consumer confidence is likely,” Bracken stressed. “As recent circumstances in Victoria have demonstrated, further Covid-19 outbreaks pose additional risks.”

Image: A Michael Hill store in Canada. (Pear285) 
Tags: Coronavirus, Daniel Bracken, Michael Hill, Rapaport News
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