Michael Hill chain tipping engagement boom in 2025

The CEO of jewellery retailer Michael Hill believes love is in the air as the end of the pandemic sees ­relationships getting back on track, with indications of an ‘engagement boom’ in 2025.

The new Michael Hill store in Chadstone shopping centre, Victoria. The company currently has about 270 stores across its three markets of Australia, New Zealand and Canada.

The CEO of trans-Tasman jewellery retailer Michael Hill says he believes that love is in the air as the end of the pandemic sees ­relationships getting back on track, pointing to an “engagement boom” next year.

Opening its new flagship, upmarket store in Melbourne’s Chadstone shopping centre this week, Michael Hill chief executive Daniel Bracken told The Weekend Australian that, despite the rising level of concerns among consumers over paying their bills and the cost of living, he expected resilience in the jewellery sector.

Mr Bracken said purchases of diamond rings, necklaces and bracelets continued, with no trading down to cheaper jewellery ­noticeable at this stage. He said he was optimistic of an “engagement boom” next year, following an engagement gap during the pandemic, and that should help drive shoppers to his stores in Australia, New Zealand and Canada.

Michael Hill CEO Daniel Bracken. Picture: Richard Walker

“Engagement rings and bridal as a whole category are 35 per cent of our business and it has been a little softer as a percentage mix of our business,” Mr Bracken said.

“But we have drawn a hypotheses that the impact of Covid and relationships being formed – so boy meets girl, or boy meets boy, or girl meets girl – didn’t happen particularly in places like Victoria or in Ontario in Canada, where you had two years of lockdowns and relationships were stifled.

“So we have a reliance on those relationships happening and at some point one year, two years or three years after the couple meet, they want to get married and get engaged and we definitely have seen what we are calling an engagement gap.

“And we are confident, and we have looked at a lot of data about how long it normally takes for a first date to engagement, and we believe that we are going to start to see an upsurge in 2025.”

Mr Bracken said people who didn’t meet for two years and then met should help stuff the pipeline of couples getting engaged in the next year or two. However, at the same time his key demographic of people aged 25-45 are feeling the mortgage pinch.

“We have three different markets we operated in – Canada, Australia and New Zealand – and Canada has been the most stable economically … and our business is returning much stronger there,” he said. “New Zealand is at the other end of the spectrum, they announced four or five weeks ago a recession and that is our most challenged market.”

From left: Sir Michael Hill, CEO Daniel Bracken, Lady Christine Hill, and chief marketing officer Jo Feeney.

He said there was a clear correlation between the consumer, how they felt about the economy and interest rates, and spending.

For now at least Michael Hill, which has about 270 stores across its three markets, has not witnessed a sharp downturn in its sales.

“Anyone that had a good year in the last two or three years like we did, you are comping (cycling) those good years. We had three record years in a row and now suddenly you are comping record year a few times and it’s tough,” Mr Bracken said.

“We aren’t see trading down … we are lifting average transaction value year after year and when people are spending with us they are not spending less.”

Into this maelstrom Michael Hill, founded by Sir Michael Hill in New Zealand in 1979, is launching its most ambitious store format yet with the opening of its flagship store in Chadstone, the product of four years of transformation under the leadership of Mr Bracken to take the retail brand upmarket.

“This new store has been part of the four-year journey and it is not going to be dictated to by a 12-month challenge in the retail environment,” he said. “We signed the lease 18 months ago, we started designing and building the store 12 months ago and this is a long-term strategy. It is not about short-term financial challenges.”

The Michael Hill store in Chadstone shopping centre, Victoria.

Mr Bracken opened the Chadstone store alongside founders Sir Michael and Lady Christine Hill.

Sir Michael said: “Since opening our first store in 1979, my wife and I have always ensured store experience remained at the centre of our brand.

“We are absolutely thrilled with what Michael Hill has created in this first global flagship, as it embodies our passion for design and fine jewellery, paired with Lady Christine’s creativity and passion for storytelling through her window displays.

“I especially love the innovative concept of discovery, offering customers a sense of exploration, encouraging guests to wander and discover the store and product at their own pace, providing a more personalised and immersive experience.”

The Chadstone global flagship store is the first of the new concept stores anticipated across Australia, New Zealand and Canada over the coming years.

Michael Hill chief executive Daniel Bracken is expecting an ‘engagement boom’ in 2025. Picture: Richard Walker

Michael Hill store in Chadstone shopping centre, Victoria.