Jewellery retailer Michael Hill admits to underpaying staff up to $25 million

Cornelia Mascio
Luglio 11, 2019

JEWELLERY retailer Michael Hill International says it will spend up to $25 million to compensate staff for historical underpayments.

The review, which was set in motion by Michael Hill's relatively new CEO Daniel Bracken and completed by PwC, revealed "historic misapplication of the Award" across a number of Australian-based staff members over the last six years, the company said in a statement to the ASX.

The review by PricewaterhouseCoopers found Michael Hill incorrectly applied Australia's fair pay law to its employment contracts and rostering practices. This could take up to several months to investigate.

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The group said it opened 10 new stores while it closed 11 "underperforming" stores along with five Emma & Roe stores during the year.

"We will move as quickly as possible to rectify any underpayments with those team members affected", Bracken said.

Separately, Michael Hill said it had managed to stop a decline in same-store sales in the three months to June 30.

They were up 0.1 per cent to $123 million, compared with the previous year, with total sales down 0.8 per cent to $133.6 million.

In New Zealand, the retailer saw a decrease in same-store sales of 4.7 per cent to NZ$115.2 million, down from NZ$120.9 million, with two stores closing and two opening over the period.

A general retail industry award has been misapplied at the jewellery retailer.

Gross margin fell to 61.1 percent in the year ended June 30, from 62.8 percent for the prior year, the company said.

E-commerce sales were up 43.6 per cent for the year ending June 30, to $16 million - more than double that of Michael Hill's largest physical store and comprising 2.8 per cent of all sales.

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