Michael Hill Makeover kicks off

The next step in the Michael Hill International story[MHI.NZ] has happened with the opening of their new format store in Auckland's Queen Street yesterday.

A move towards a more sophisticated look inside and out is designed to take the company towards the higher end of the jewelry market and then hopefully higher margins.

This particular outlet is what the boffins call a "flagship" store and its charcoal and grey colours, along with its new lighting design is designed specifically to get those higher end punters in the door -revamps of retail stores tend to get more punters through the door, not this shopper though.

From Michael Hill himself on the reasons for the change:

“As the original high-end retailer in this part of Queen St, we’re delighted to be delivering a contemporary shopping experience to our customers.

“It’s important to move with the retail environment. As our customers evolve so too must we. This new store design has become the benchmark for all stores going forward, Hill said.



On the purchase his company made last year of bankrupt jewelry retailer Whitehall Jewelers:

"When you're opening in a new market and opening in a place like Chicago that has been particularly depressed you can't just roll out the old thing and expect it to work. It's really when you have to do things that you come up with your best."

Hill has himself said that the Chicago purchase was a mistake (listen to Michael Hill interview - You need to register first ) because of the price paid for it so it is either a very positive move by him to spend millions on the 17 United States stores or throwing good shareholder money after bad - I tend to think he knows what he is doing but having said that the US is a particularly hard market for outsiders to crack. Pumpkin Patch Ltd [PPL.NZ] has also had recent difficulties with its US operations, incurring significant losses, so this is a very tough market, especially in the current economic conditions.

The revamp of the company image comes in a year where underlying 2009 profit has been down by more than 45% and its share price hit because of the overall retail downturn.

Michael Hill shares closed even at NZ 72c yesterday.


Disclosure I own Michael Hill International shares in the Share Investor Portfolio.


Michael Hill International @ Share Investor

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Discuss this Topic @ Share Investor Forum


Buy Toughen Up: What I've Learned About Surviving Tough Times



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Michael Hill: Interview with Ian Fraser

You may have missed an interview with Michael Hill yesterday with Ian Fraser. I only caught it by accident while turning the dial.

Michael is currently on a media blitz to sell his book and this is another but more interesting leg.

The interview covers off his personal background and motivation to get him where he has.

It is very interesting to hear that up until the infamous house fire when he was 43 he wanted to "do more" in life but, like most of us, was fearful of making that step out of the comfort zone we place ourselves in. After that incident he reacted in a way that most wouldn't - he calmly decided that there was more to life than what he had experienced thus far and he was going to "go for it".

The fire somehow was the impetus that removed that block and allowed Hill to face new things without fear and that we all face that moment when a choice can be made that will change our lives but we don't always take it. -he did.

There was also an interesting admission, he mentioned that he has made a mistake by buying Whitehall Jewelers Holdings-based in the Chicago out of bankruptcy last year - not usually something that CEO's would readily admit to and he says he has learnt from it, the struggling US business has taught the company as a whole how to respond to the current tough economic times, he said.

I would recommend a listen, the interview is 46 minutes long, 16 MB and can be downloaded at Share Investor Forum here. You have to be a member to download, its free and quick - register, it takes less than a minute.


Disclosure I own Michael Hill International shares.


Michael Hill International @ Share Investor Blog

MICHAEL HILL - Toughen Up: What I've Learned About Surviving the Tough Times
Stock of the Week: Michael Hill International
Michael Hill TV3 60 Minutes Interview
Long VS Short: Michael Hill International
Marketwatch: Michael Hill International
Michael Hill's profit shines
Michael Hill takes on the windy city
Why did you buy that stock? [Michael Hill International]
MHI has defined growth strategy
MHI profit sparkles

Discuss this Topic @ Share Investor Forum


Buy Toughen Up: What I've Learned About Surviving Tough Times



$NZ 33.82 -15% off - from Fishpond.co.nz


c Share Investor 2009

Good opportunities exist for buying in current stockmarket

Everyday my portfolio takes another downwards trajectory. How about yours? Economic conditions in New Zealand and globally don't look good for the short to medium term.

There are more losses to hit markets in relation to the Sub Prime fallout, that initially revealed itself almost a year ago and the losses that have been crystalized in balance sheets around the world have had the consequent affect on credit markets, economic confidence and outlook. Future sub-prime losses will clearly continue this trend.

The added pressure of spiraling oil, food prices and every other good and service has left consumers pockets closed for business and those businesses are going to suffer as we all continue to prune costs.

Share prices have been reflecting this for more than six months but now we are set for more stockmarket revaluations as the economic gloom prepares to make itself at home.

Never fear though!

If like me you have been prepared for this you would have been squirreling away money while you could in anticipation of harder times then great. Some of our listed companies have hopefully been doing the same, unlike our present administration, and this is going to put you and them in good stead for a slow down.

It looks very likely that our stockmarket will be breaching the 3000 mark sometime this year and with that comes opportunity for buying.

The biggest opportunity for good wealth creation in the long term I would think would be US dollar sensitive stocks, all of which have been hammered over the last year because of the relative weakness of the US dollar.

It looks like the tide has turned for our dollar, with mutterings from Allan Bollard of interest rate cuts later in 2008 and the Fed talking up US interest rates.

Rakon[RAK.NZ], Fisher and Paykel Healthcare Ltd [FPH.NZ], Mainfreight Ltd[MFT.NZ], Sanford Ltd[SAN.NZ], Delegats Ltd[DLG.NZ], Pumpkin Patch Ltd[PPL.NZ] and Fletcher Building Ltd[FBU.NZ] will all benefit from the falling exchange rate while many of these companies are ready benefiting from the lower NZ/AU dollar cross, joined by the likes of Sky City Entertainment Group Ltd[SKC.NZ], Telecom NZ Ltd[TEL.NZ] and Michael Hill International[MHI.NZ] which have substantial operations in the West Island, Australia.

The biggest star that will benefit from this, which I conveniently hold, is Fisher and Paykel Health.

The company has profit sensitivity of approximately NZ$2.5 million, per one percentage point change in the value of the NZ dollar and as our exchange rate is off its recent high of .82c and is currently less than .76c then there is significant upside as the dollar retreats towards its historical levels of below 60c to the US dollar.

Its sales are also increasing strongly, so its upside in the medium to long term looks very good.

Apart from the opportunities related to a falling NZ currency there are also some very good companies ripe for bargain hunters flush with cash from better days and investors would be mad not to do some spending instead of getting those brokers and financial advisors wealthier by selling stocks and getting into gold, commodities, fixed interest, cash or some other over valued asset class.

Disc I own MFT, FPH, SKC, MHI, PPL, and FBU shares in the Share Investor Portfolio


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From Fishpond.co.nz - Buy Toughen Up: What I've Learned About Surviving Tough Times



Toughen Up - Fishpond.co.nz



c Share Investor 2008