Michael Hill is embarking on a significant rebranding initiative, aiming to reposition itself within the high-end sector of the fine jewellery market.
This strategic move comes at a time when the company has observed a decline in profit, despite an increase in sales. The rebranding effort includes a colour scheme change to green and gold, reflecting the company’s New Zealand heritage.
Alongside this, Michael Hill plans to open new flagship stores, starting with a location in Melbourne, which is expected to be the first to showcase the brand’s future direction.
Financial Context
The backdrop to Michael Hill’s rebranding strategy is a financial year marked by challenges. The company reported a profit after tax of A$15.4 million, a decrease of nearly 60% from the previous year. However, it’s noteworthy that sales have increased by 4% to A$362.7 million.
This situation highlights the pressures on margins, largely attributed to the rising costs of gold and diamonds, coupled with increased advertising expenses. The retail conditions for the fine jewellery sector have been described as challenging, particularly in the New Zealand market, which has seen a decrease in sales.
Brand Refresh
Michael Hill will introduce a refreshed aesthetic across the brand, including its assets, colour palette, and logos. Daniel Bracken, a spokesperson for the company, emphasized that the new green and gold colour scheme pays homage to New Zealand’s heritage and landscape.
This change is part of an 18-month plan, culminating in the opening of a Melbourne flagship store, which will introduce the concept of “store of the future” featuring private selling spaces.
Market Repositioning
Michael Hill’s decision to reposition itself in the higher end of the market is a strategic response to the evolving consumer landscape. This repositioning is accompanied by the introduction of a new high-value product offering, indicating a shift towards more premium segments.
The company’s expansion plans include the opening of 70 more Bevilles stores in Australia over the next three years, signifying a robust approach to widening its market presence. Furthermore, Michael Hill’s investment in security measures in response to rising theft incidents underscores the ongoing operational challenges retailers face.
“While the economic conditions and retail environment remain challenging in all markets, we are encouraged by our ongoing performance in Canada as a lead indicator, and early green shoots in Australia in the second half,” said Bracken.
