Michael Hill buys US stores

The $7 million deal is conditional on approval of the sale from the US Bankruptcy Court. The sale will be funded by existing cash resources and bank facilities, and is expected to be finalised by September 9.

The price was set at 80 per cent of the inventory of the chain, and includes Whitehall’s rights with respect to store fitouts and leases for all 17 stores and all other trading assets at those locations.

Michael Hill International say they are 17 prime locations that will provide a launching pad to the US market that fits its historical pattern of building a concentration of stores in new markets.

The purchase is viewed as a strategic acquisition given the dire US economy, and although it does not expect to achieve profitability for several years, views the deal as too good a bargain to pass up entering the US market.