Michael Hill is set to launch a new brand targeting high-end consumers, following a group revenue increase in fiscal 2023.
TenSevenSeven will launch in the first half of FY24, offering a personalised diamond ring proposition.
Michael Hill confirmed the release will allow the company to target all consumers in the fine jewellery market. This includes its value-end acquisition Bevilles and its mid-market flagship brand Michael Hill.
TenSevenSeven is expected to launch as an eCommerce site, supported by a gradual roll-out of limited showrooms in key capital cities.
Customers can select from thousands of diamonds and a ring design of their choice to be handcrafted in the Michael Hill artisanal workshop.
The launch comes as the jewellery retailer reports revenue growth in Australia and New Zealand.
Michael Hill group operating revenue increased by 5.8% to $629.6 million in fiscal 2023, with Australia up 9.1%, New Zealand 5.8% and Canada remaining flat.
The Australian market recorded the largest portion of revenue for FY23 at $331 million. Gross margin was at 64%, down by 0.9% on FY22, but up 210 bps on pre-pandemic.
Comparable earnings before interest and tax (EBIT) decreased by 6.3% to $58.9 million, with the business citing inflationary cost pressures and substantial investments in New Zealand security measures.
During the year, two stores opened and three under-performing stores closed, resulting in 172 stores (including 26 Bevilles stores) at year end.
For New Zealand, revenue was at NZ$132.4 million for the year. Gross margin was down slightly to 61.9%, with Michael Hill citing a higher penetration of diamond sales in this market for the result.
Digital sales were largely flat at $41.3 million compared to FY22, with Michael Hill noting this demonstrates a strong second half recovery from a negative 9% at the end of the first half.
Brilliance by Michael Hill membership is now over 2 million, up 600,000 from FY22, driving repeat customers and higher average transaction value.
“While we finished the year with comparable EBIT slightly below prior year, we still delivered the second highest profit year in the company’s history, even with the significant increase in security investment to protect our New Zealand customers and team members,” managing director and CEO Daniel Bracken said.
“Trading in the second half proved to be much harder, with economic headwinds impacting consumer confidence, and in turn sales. Considering the pressures we have experienced on input costs across both diamond and gold pricing, our gross margins held up well.
“The Michael Hill business is built on the foundations of a great culture and a fantastic team, and I’d like to both acknowledge and thank the team for their unwavering focus and energy throughout the year.”