Jeweller - December 2020

HILLS AND VALLEYS
KEY MOMENTS FOR
MICHAEL HILL
It’s been a topsy-turvy decade for Michael Hill
International. Following the opening of his first
store in 1979 in the New Zealand town of
Whangarei, jeweller Michael Hill became well
known for unique designs and utilised highimpact
advertising to elevate the business to
national prominence.
The company grew steadily, and by 1987 it had
10 stores and was listed on the New Zealand
Stock Exchange (NZX). At the same time, the
company expanded into Australia, opening
four stores in Brisbane over four weeks.
In 2002, the company opened five stores in
Canada and six years later made inroads into
the US market by acquiring and re-branding
17 stores from Whitehall Jewelers.
In January 2011, and the age of 72, founder
Michael Hill was granted a knighthood in
New Zealand’s New Year Honours List.
After a long and illustrious career, Sir Michael
retired as his namesake company’s chairman
in November 2015 and the following year
Michael Hill International (MHI) was listed on
the Australian Stock Exchange (ASX).
At the time, 60 per cent of its stores were in
Australia and more than 80 per cent of MHI’s
revenue and profits were generated outside of
New Zealand.
The company began trading on 7 July 2016 at $1.15
per share. At the time of publication its share price
was $AU0.32 on the ASX and $NZ0.34 on the NZX.
The company’s 2020 Annual Report recorded a total
of 290 stores; 155 stores in Australia (dropping to
154 by December 2020), 49 in New Zealand and 86
in Canada. It reported revenue of $492 million and
post-tax profit of $3 million.
In October 2016 the Hill family trust, Hoglett
Hamlet, sold 10 per cent of its stake – 16 million
shares – in MHI for $25.6 million. However, it
remains the company’s largest shareholder,
owning 38 per cent of the company.
CONTINUED FROM PAGE 42
restructured and four months later a new
store was opened at Melbourne’s Westfield
Fountain Gate.
Then, in December 2015, the chain opened
a new Melbourne CBD store, having exited
Bourke Street Mall in 2011 when it was
“outbid” by Swarosvki for the ‘flagship’
location where it had been mall positioned
for more than a decade.
At the time, Michelle Beville said, “The
lease was up and we put in a bid to renew,
however the landlord decided to go out to
market after international interest [from
other retailers].
“International players have come to town
and they have the ability to pay fabulous
rent. The right rent moving forward [for
smaller companies] is difficult, due to these
international companies.”
In October 2017, Indian jewellery company
Tara Jewels acquired a 49 per cent stake
in Bevilles, four years after forming a
“strategic alliance” with the Australian
jewellery retailer.
While the recent history of Bevilles is
tumultuous, its current position perhaps
indicates the resilience of its management.
After ‘losing’ the high-profile Bourke Street
Mall store and entering administration, the
business was subsequently rebuilt, bringing
its store count back to 24 – close to its peak
of 29 in 2010.
By anyone’s reckoning, that’s no mean feat.
Another Victorian-based chain has also
proved quite resilient over the past 10 years.
Salera’s began 2010 with 21 stores – 15 in
Victoria and six in Queensland – increasing
to 23 the following year.
Alfredo Salera founded the business in 1953;
by December 2020, its store count was 18 –
a sustained record for a family-owned and
operated mid-sized chain.
Hoskings Jewellers has also proved
relatively robust. It made Jeweller’s list in
2010 with 17 stores, and today the Victorian-
IN SUMM A RY
Insights
Fashion
jewellery chain
stores have
seen a massive
decline, due
to increased
competition
and occupancy
costs
Fine jewellery
chain stores
have remained
resilient, when
compared with
both fashion
jewellery and
the broader
discretionary
category
Fine and
fashion
jewellery
remain
differentiated
in the market
Large jewellery
groups have
maintained
control of
fine jewellery
chains
Lovisa has
become the
dominant
player in
fashion
jewellery, with
152 stores
and no major
competitors
based jeweller still operates 16 outlets.
The company also owns the Goldsmith
brand, which has been less fortunate;
seven stores were closed in the past
10 years, with its numbers falling from
nine to two.
With that said, three Goldsmith stores
were converted to Pandora ‘Concept
stores’; Hoskings now operates six
Pandora stores in total (see page 40).
The 2010 SOIR also detailed that Hoskings
owned and operated four other jewellery
stores: three under the Sterns brand and
one Diamond House. These stores no
longer exist.
Once again, taking into account the demise
of many high profile and long-standing
retail businesses across the apparel
and fashion accessory categories, the
resilience of fine jewellers is impressive.
Other well-known names that have stood
the test of time include NSW’s Gregory
Jewellers and Regency Jewellers.
In 2010 Gregory Jewellers was listed as
a small-sized chain with 16 stores, and
today it has 15.
While one Gregory store was technically
closed, it was converted to a Gucci store
operated by Gregorys.
Another small chain, Regency Jewellers,
which was founded in 1968, has also fared
well. It operated six stores throughout
regional NSW in 2010 and it still operates
the same number today.
The same cannot be said for the
Queensland based Anthonys Fine
Jewellers.
It was listed with eight stores in the
2010 SOIR, however today it has been
reduced to five across Brisbane. Owned
by Queensland Wholesalers, the company
also operated three Kings Jewellers stores
in 2010 – all of which have ceased trading.
While Anthonys, with five stores, continues
to be defined as a ‘chain’, the same
cannot be said for Brisbane-based Pascoe
Jewellers or Melbourne-based Dio Oro
Jewellers, which was re-branded to
Diamond Valley Jewellers this year.
Both have suffered over the past 10 years.
Pascoe closed six stores (from nine to
three) and a seventh – located in Ipswich,
Queensland – is scheduled to close on
Christmas Eve this year, due to owner
Geoff Pascoe’s ill health.
Dio Oro has reduced its store count from
seven to one. Therefore, both businesses
have been removed from Jeweller’s
‘chain’ store list, along with Goldsmith, as
mentioned previously.
While the wider Australian non-essential
(discretionary spend) retail industry has
suffered greatly in the past decade, it’s
fair to say that many industry experts
had predicted bleaker times for fine
jewellery chains.
In the past decade only two names
disappeared altogether and, although
there has been a net loss of 118 stores
from the original 978, 63 closures were
from Zamels alone.
Reviewing the past 10–15 years – the first
of Jeweller’s analysis of jewellery chains
was published in 2003 – many jewellers
lamented the rise of, and competition
from, fashion jewellery.
It was viewed as ‘cheap product’, however,
this category has been impacted most by
changes in the retail sector.
To that end, fine jewellery retailers
have demonstrated an adaptability and
buoyancy over the past decade that
was not only unexpected, but should be
celebrated given the current times.
Editor’s note: A previous version of this
report was published digitally in July 2020.
This version includes updated figures that
were correct as at 1 December 2020. It
should be recognised that even though some
jewellery websites remain “live”, this does not
mean the business or its bricks-and-mortar
stores still operate.
December 2020 | 45