Jeweller counting on own watches

Mike Parsell

Michael Hill International is bracing for tighter margins because of currency and gold price fluctuations.

But the company is banking on a boost in sales as a result of its shift to own-brand wristwatches.

Chief executive Mike Parsell announced yesterday that first-quarter total sales for the company in New Zealand, Australia and Canada were $70,346,330, up 21.9 per cent on the three months to September 30 last year.

Overall same-store growth increased 10.5 per cent to $61,453,292. In Canada, same-store sales increased 24.3 per cent, New Zealand 4.4 per cent and Australia 12.4 per cent.

Parsell warned that changes in the price of gold and currency over the past six months would have an impact on margins during the second quarter. He said Michael Hill planned to phase out brand watches and expected to stock 80 per cent Michael Hill watches by June 30 next year.

The company would continue to stock 20 per cent of Citizen brand watches because of its ongoing relationship with that company. At present 10 to 15 per cent of watches in Michael Hill stores are own-brand.

Parsell said the move made it easier to bring new fashion models to the market swiftly without waiting for the brands manufacturers.

Meanwhile, he was optimistic that the company had gone beyond the early flurry of stores and stores selling costume jewellery or "bling".

Last Christmas there were concerns that costume jewellery would hurt sales of its lower cost items under $79, but that had not occurred.