The retailer has struggled in a tough Australian market over the last year, but there has been a glimmer of hope coming from, perhaps surprisingly, stronger North American sales.
Same store sales in the US experienced an impressive 17.5 per cent increase, while Canada grew by 6.4 per cent. Even consumers from New Zealand, where the chain began, chipped in with a 8.9 per cent rise.
“Third quarter sales were satisfactory in New Zealand, Canada and the US, however the Australian market continued to be difficult for the group due to the ongoing tight retail conditions,” company chairman Michael Hill said in a statement.
“This sluggishness in the Australian market has resulted in our group “same store” sales being flat for the nine months, however the directors are pleased with the solid growth achieved in the other three markets,” Hill said.
Chief executive Mike Parsell told The Australian that the company isn’t the only jewellery retailer suffering.
"The Australian retail market has been fairly difficult in the last two quarters because of the uncertain economy and poor consumer sentiment,” he said. “Consumers are being very cautious. Gold jewellery has slowed quite a bit because of the higher price of gold. We are looking at lower margins from the sale of gold jewellery."
Another silver lining to the disappointing Australian results is the increase in maintenance and jewellery repair business. The Professional Care Plan (PCP) accounted for about $20 million in the past nine months.
“Cash flow continues to grow for the Group,” Hill said, “due primarily to the ongoing success of the PCP product launched in October of 2010.”
More reading: Australian market hurts Michael Hill