Jewellery chain Michael Hill International will close 80 per cent of its struggling Emma & Roe stores at the cost of up to $7.9 million, with just six outlets surviving the cull.
The Brisbane-based company on Tuesday said it expects to close 24 stores by June 30, with the remainder to be repositioned in previously announced move to service the ‘demi-fine’ jewellery segment.
Michael Hill said it will now formalise the non-binding in-principle lease exit terms it has negotiated with most landlords.
‘The company considers that the six-store footprint will provide the opportunity to iterate the new model at speed,’ Michael Hill said in a statement to the ASX.
It did not say how many people would lose their jobs, but said some staff could be relocated to Michael Hill stores.
The others would be offered redundancy.
The total one-off cash cost of closing the stores and paying employee severance is estimated to be between $5.8 million and $7.9 million.
Michael Hill said landlord negotiations related to the previously announced closure of its nine loss-making US stores are still ongoing.
The jeweller last month reported a 66 per cent drop in first-half profit to $8.7 million, mainly due to provisions related to Emma & Roe and the US exit.
Michael Hill shares have shed about 18 per cent of their value since January 25.