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.
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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.