Hill's grand design

BY PETER GRIFFIN


If you thought jeweller Michael Hill had already built an impressive business empire, you ain't seen nothing yet.

Hill wants to have 1000 stores dotted around the globe within 18 years and become the "world's first middle-class jewellery chain".

And the 66-year-old businessman wants to be around to see his grand vision realised.

"I'm damned sure we're going to do it," Hill told shareholders at Michael Hill International's 17th annual meeting in Auckland.

His recipe for success during the past 25 years has been to keep things simple and expand store by store.

But as the pace of store openings quickens, Michael Hill is entering a phase of expansion it hasn't seen since the mid-90s.

The jewellery shops generated $260 million in sales and a $15 million profit in the year to June. Michael Hill paid out a 21c per share dividend for the year. The quarter to September was also healthy - sales were up 10 per cent.

Growth in New Zealand is in single digits but Australia is booming for the jeweller, contributing 65 per cent of sales. Then there's the fledgling Canadian operation - six Vancouver stores overseen by daughter Emma Hill. The stores lost $1.4 million on revenue of $5.9 million, in line with expectations.

Michael Hill chief executive Mike Parsell said the Canadian operation would make money as it gained scale.

"We're not out of the woods. We'll need 12 stores open to break even," he said.

Hill described the Canadian debut at yesterday's AGM as "like going to a different planet".

"They didn't like our yellow gold; they liked white gold."

His quirky advertising, which he has traditionally fronted, did not go down well initially. But the company has adapted - designing and making jewellery to Canadian tastes.

Hill is now talking about pushing east into Calgary and Edmonton and across the border into the US.

But his ambition stretches further. He sees huge opportunities in mid-size British towns where dowdy jewellery shops do a poor job of making jewellery selling glamorous.

"There's chewing gum in the carpet, the jewellry is stained. But they're taking good money and it's in sterling," said Hill, who won a pay increase for his directors.

Addressing some of his longstanding shareholders by name, Hill gave them to a long, nostalgic speech referencing 50 years in the jewellery business before plying them with food and drink and sending them away with a bottle of champagne each.

Over the decades, he's greeted shareholders with leotard-clad models bedecked in jewellery, borrowed advertising tricks from Harrods and Rolling Stone magazine and decked out his shops to suit the fashions.

"The marble era wasn't a good one. People thought I was in some kind of cult," said Hill, who will no doubt get his thousand stores if the business keeps pace with his vision.