Michael Hill International is the latest locally listed company to prune back its United States operations, with the retailer revealing that almost half its US stores will close at the end of the month.The jewellery chain acquired 17 stores in Illinois an
Michael Hill International is the latest locally listed company to prune back its United States operations, with the retailer revealing that almost half its US stores will close at the end of the month.
The jewellery chain acquired 17 stores in Illinois and Missouri from Whitehall Jewellers in September 2008, but will pull back to Chicago this month with the closure of eight of the stores.
The US operation is expected to post a $US6 million loss in the 2009/10 financial year, excluding the cost of the move.
Michael Hill has been in the Canadian market since 2002, but picked the worst time to enter the US.
In its announcement this morning, the retailer said the 20-month “test” of the US market was conducted in the face of “some of the harshest retail and economic conditions in recent history”.
All of the remaining nine stores will be based in the greater Chicago area and will be immediately refurbished, but the remaining eight stores will be closed at the end of June.
Lease exit terms have already been negotiated and the total cost of closing the eight stores is expected to be $US1.8 million, with these costs absorbed in the current financial year.
Michael Hill is not the first local retailer to pull back its US operations, with Pumpkin Patch going through a similar restructure over the past year.
The jeweller said it still plans to open 15 more stores in other markets over the coming year.
