Pandemic restrictions impact Michael Hill’s profit & sales during 2020 financial year

Australian jewellery chain Michael Hill’s store closures during the height of the coronavirus lockdown period have severely impacted its sales and profits for the 2020 financial year, as reported in The Australian.
The Queensland-based company posted a statutory profit of $3.1 mn for the 12 months ending June 30, an 81.5 per cent slump from its 2019 financial year result of $16.5 mn. The earnings before tax and interest were $14.1 mn, a 33.3 per cent decline on the previous corresponding period. Michael Hill has jewellery stores in Australia, Canada and New Zealand.
Michael Hill chief executive Daniel Bracken said before the pandemic, the company was experiencing positive sales momentum, but mandatory government-enforced retail shutdowns stifled trading conditions.
“While the COVID-19 closures had a severe impact on headline sales and profit, I was particularly proud of the determination, resilience, and agility of our team across the business through the shutdown and temporary closure periods. The reopening of our store network saw pleasing sales recovery despite lower foot traffic and a return to strong margin performance against the prior year,” Bracken said.
The company said online sales had surged to record levels, posting a full-year digital sales figure of $24.7 mn, up 54.7 per cent compared with the financial year 2019.
Digital sales represent 5 per cent of the group’s total sales revenue. Bracken said ‘the company was monitoring store closures within Victoria and Auckland, but business conditions in the current financial year were improving. The gross margin improvement has continued as our investments in strategic initiatives gather momentum. The company has identified several growth and margin opportunities to strengthen our business across product, digital and a truly omnichannel offering’.

Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished