New Zealand-born retailer, Michael Hill, has unveiled plans to significantly expand its Bevilles store count. The company aims to open between 80 to 100 Bevilles stores by FY28. This comes after Michael Hill’s acquisition of Bevilles earlier this year for $44.6 million. Currently, Bevilles operates 26 stores across Australia.
In a recent investor presentation, Michael Hill CEO, Daniel Bracken, shared insights on the Bevilles’ store rollout. He confirmed that three new sites have already been secured, with an additional three nearing finalisation, targeting a pre-Christmas opening. Bracken emphasized the company’s focus on acquiring new real estate, ruling out any immediate plans to convert existing Michael Hill branded stores.
Bracken stated, “We want to understand the opportunity in the market across each of our major landlord partners as to what real estate’s available, what sort of deals might we be able to secure.” He expressed satisfaction with the initial three sites secured and mentioned receiving favorable terms from landlords.
The second half of FY24 will see the roll-out of more stores, contingent on the availability of commercial real estate. Six stores are planned for this period. The overarching goal is to open 10-15 new Bevilles stores every financial year, reaching a total of 80-100 by FY28.
Furthermore, all Bevilles staff will be retained and transitioned. Michael Hill also plans to expand its lab-grown diamonds range, enhance service offerings like repairs and care plans, and increase its third-party brand offerings.
Introduction of TenSevenSeven
Michael Hill is not just stopping at expanding Bevilles. The company is gearing up to introduce a high-end brand named TenSevenSeven. This brand is set to launch across Australia in early October, with its first showroom opening in the country in the latter half of FY24.
TenSevenSeven aims to cater to the luxury segment of the jewellery market. Bracken shared insights from their market research, stating, “We are very deep in the knowledge of all the global players in this category.” He emphasized the importance of complementing digital offerings with a physical showroom.
The initial launch of TenSevenSeven will be a soft one, with no significant marketing spend. The company plans to engage with its top-tier Brilliance by Michael Hill members to gauge interest in the new brand. The goal is to have the brand fully operational and tested by Christmas.
In terms of pricing, TenSevenSeven is set to occupy the higher end of the spectrum. The expected average transaction value ranges between $5,000 and $8,000, with some products surpassing the $100,000 mark.
Financial Performance and Future Outlook
Despite challenges like inflation and rising interest rates impacting consumer spending, Michael Hill reported a sales increase of 5.8%, amounting to $629.6 million in the past financial year.
CEO Daniel Bracken remains optimistic about the company’s strategy, stating, “While inflation and rising interest rates have impacted consumer spending, I am confident that the group strategy has us well-placed to continue to take market share.” He further highlighted the strength and resilience of the Michael Hill brand and its focus on key moments in customers’ lives.
With the upcoming launch of TenSevenSeven, the expansion of Bevilles, and new product innovations lined up for Christmas, Michael Hill appears poised for a promising year ahead.
The company also shared that its loyalty program, Brilliance by Michael Hill, now boasts over two million members, accounting for 82% of overall sales
