Michael Hill shifts focus to diamonds

6.5 k views | Posted November 15, 2011 | By Aaron Weinman

Jewellery chain Michael Hill has its sights set on diamonds and high-end jewellery.

At the company’s annual general meeting in Auckland, New Zealand, founder and chairman, Sir Michael Hill announced that diamond products now comprised 60 per cent of the retailer’s sales.

“Diamonds are now the best part of our business,” Hill said. “That’s a colossal change in the last few years.”

Hill cited a significant change in the branding of the business as driving the change, particularly its approach to styling and marketing.

“What we’re finding is that our brand is actually changing from a transactional discounter to more of a brand,” Hill told New Zealand website Stuff.co.nz. “This is a long-term vision and a gradual process.”

The group now has its own manufacturing division at its Brisbane-based head office. Hill told shareholders that the company has employed the services of one of the world’s top diamond buyers.

Company CEO, Mike Parsell told Jeweller that the company has been focused on the diamond category for a long period and has experienced good sales figures as a result.

“We’ve invested a lot more inventory into this area,” Parsell said. “We are mainly focused on bridal jewellery and diamond jewellery as a fashion item.”

Parsell added that the demand for high-end jewellery has increased this year and with it Michael Hill’s shift into the high-end market has met success.

“As our business has gotten stronger, the diamond end has proven to be a stronger part of our business,” Parsell said. “We’ve always enjoyed business in high-end diamonds, but we’re just not well-known for it.”

Parsell added that popularity for bridal and diamond jewellery increased after the success of an international competition the company ran last January.

The competition titled,” Sparkling Shining Love,” awarded one lucky couple with a 22-carat diamond engagement ring and “We certainly have seen a lift in demand for diamond engagement rings since that promotion,” Parsell said.

Meanwhile, after its Professional Care Plans (PCP’s) venture – an add-on service launched in October 2010, which incorporates polishing, cleaning and plating jewellery bought through the retailer made a profit of NZD$5.4 million (AUD$4.1 million) the firm intends to explore other business opportunities in order to boost its brand.

Due to be released later this month, a new perfume range, Clarity, has been designed by Hill’s daughter-in-law, Monica Hill.

“We’re moving towards launching differentiated product collections to give us a point of difference and reduce competition,” Hill said. “I’ve got one eye on new opportunities where we can add new revenue streams.”

The 240-store retailer with outlets across Australia, New Zealand, Canada and the US plans to open another 20 stores this financial year, after unveiling its 11th for 2011. The planned expansion follows a strong first quarter performance to September 30 this year, where stores across all four markets were profitable.

“We are targeting 8-10 stores in Australia, one or two in New Zealand and the balance across Canada,” Parsell said.

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