Coming out of perhaps the toughest year in Michael Hill International’s history, the company is relentlessly tenacious about its eventual expansion into a truly global brand.
Speaking at the company’s annual meeting this morning, Michael Hill passionately urged shareholders to stick with him.
“We’re not in this just to partake. We’re in it to win.”
And to win, Michael Hill [MHI: NZX] needed to crack the US, he said.
But with weak same store sales everywhere but Australia for the three months to September, that was not going to happen overnight.
“It’s going to take some time. In some places of the US we still have the old stores with our name stuck on the front of them – how the hell can they work for god’s sake.”
Entering the US had been like suddenly swimming in the Olympics, he said.
In August, Michael Hill reported a 46.3 per cent drop in pre-tax profits for the 2009 year. Net profit before tax fell to $20.1 million, but a one-off deferred tax credit of $53 million took tax-paid profits to $69.5 million.
Chief executive Mike Parsell said this year, the emphasis was on improving existing store business, gaining traction in Canada and learning about the US market as quickly as possible.
Mr Parsell said the company would be selective about expansion.
Mr Hill said he predicted New Zealand was going to have a good summer. “I think there are green shoots in New Zealand.”
After the meeting, Mr Hill said that may not be the case for the entire economy, but he felt the company was getting the message right.
New livery changes consumer patterns
Mr Hill said the company was changing its model into “quite a different beast than it was before.”
It’s new livery, now at its Queen St and Newmarket store in Auckland, Lambton Quay in Wellington, Palmerston North along with one in Australia and Chicago, was changing consumer opinion about Michael Hill.
“It’s making it a place of a more serious purchase,” he said. “Already in these shops, we are seeing significant improvement in the day to day takings.”
Website important new future
Michael Hill new website, online in about two to three weeks, would become a leading flagship store, said Mr Hill.
“It will become a big part of our business.”
After the meeting, he said it was the right time to launch.