MHI
10/06/2016 13:39
GENERAL
PRICE SENSITIVE
REL: 1339 HRS Michael Hill International Limited
GENERAL: MHI: MHI announces Emma & Roe will expand after successful trial
10th June 2016
Michael Hill announces Emma & Roe will expand after successful trial
? The Emma & Roe brand will move into growth mode effective July 2016
? The business has delivered strong same store revenue growth of 35% for the
11 months to May 2016
? Retail presence is currently 15 stores and an eCommerce capability
? Emma & Roe complements the Michael Hill brand by offering a range of
interchangeable jewellery that allows women to create and design their own
look
? Store level ROI will exceed the Group's hurdle rate in FY16 year and is
expected to rise further as the business achieves scale and maturity
? Emma & Roe as a business segment will remain in loss during the 2016-17
year as it gears up for growth with increased infrastructure and additional
talent appointed to meet our growth ambitions
Michael Hill International (NZX: MHI) is pleased to announce that Emma & Roe
will move from trial to growth phase starting July 2016. 12 new stores are
planned for 2016-17 with significant growth potential in future years. New
store ROI is forecast to exceed the Group's ROI hurdle rate from the first
full year of trade and grow further as the roll out gains scale and maturity.
"Emma & Roe will deliver strong, profitable growth from consumer segments
that complement our existing Michael Hill brand. In keeping with MHI's focus
on consistent profitable growth we trialled the brand for 2 years to assess
its potential and fit within the Group. The Board is confident that Emma &
Roe will play an important and ongoing role in the company's growth and
profitability" said CEO Mike Parsell.
Stores are currently located in Queensland and Auckland NZ, with the NSW
launch to go ahead in July 2016.
Emma & Roe (E&R) store metric
o The E&R brand was launched in 2014 and now comprises 15 stores in
Queensland and one in Auckland as part of a thorough trial process. Based on
the success of the trial, a further 12 new stores are planned for 2016-17 and
will be opened in Queensland and NSW
o E&R delivered 35% sales growth in the 11 months to May 2016 on a 'same
stores' basis and total sales growth for the same period of 87%
o Average revenue is forecast at approximately $1m per store in 2016-17
o EBIT margin is expected to exceed the Michael Hill stores over time once
critical mass has been established in each market
o Capital requirements are approximately half that of Michael Hill stores and
stock turns nearly twice as fast
Expansion plans
In keeping with the Group's focus on consistent profitable growth the Emma &
Roe store roll out will commence at around 12 stores per year but openings
could grow to as many as 20 stores in coming years depending on the
availability of quality sites on acceptable commercial terms. Longer term the
Group sees potential for at least 300 Emma & Roe stores in its existing
markets of Australia, NZ and Canada, a similar number to its Michael Hill
brand. Opportunities also exist for growth into other markets and
distribution channels once the bricks and mortar format has gained sufficient
traction to support these formats. The Emma & Roe brand presence is being
achieved via a multi-channel format in all four existing markets (Australia,
New Zealand, Canada and USA) through the presence of its branded products in
our Michael Hill stores. We are building a strong online presence for Emma &
Roe in Australia and this will follow into our other markets as the E&R
stores are established.
About Emma & Roe
Emma & Roe is a new jewellery experience with a range of proprietary
jewellery that is interchangeable, offering limitless options to mix and
match, and create endless looks and styles with the collection. The jewellery
is fine quality made from 10 carat gold and sterling silver, and features an
array of precious and semi-precious stones including diamonds, Murano glass,
and other gems. Emma & Roe's target market are women who love to create, mix
and match jewellery to express themselves.
Emma & Roe is named after the two most important women in Sir Michael Hill's
life and his admiration for their unique creative and personal styles of
self-expression.
A professional artist, Michael's wife, Lady Christine Hill (nee Roe), has
long been an inspiration for him. Her creative aesthetic and expression
providing the element of detail, beauty and permanence which should be
present in all jewellery.
Their daughter, Emma, provides a dynamic counterpoint to the idea of
permanence. Living a busy and connected life which celebrates a series of
ever-evolving moments, her passion for self-expression through style reflects
her personality and daily reality.
It was from the confluence of these ideas of self-expression and creativity
that the Emma & Roe brand was born.
For further information:
Mike Parsell CEO +61 403 246 655
About Michael Hill International
Michael Hill International was founded by Sir Michael Hill in 1979 when he
opened his first jewellery store in Whangarei, New Zealand. The Group
currently has 295 Michael Hill branded stores in New Zealand, Australia,
Canada and the US and 16 Emma & Roe branded stores in New Zealand and
Australia. The Group's global headquarters including its wholesale and
manufacturing divisions is located in Brisbane, Australia. The Company is
listed on NZX (NZX:MHI).
For more information:
http://investor.michaelhill.com www.michaelhill.co.nz www.emmaandroe.com.au
End CA:00283841 For:MHI Type:GENERAL Time:2016-06-10 13:39:30
