re Michael Hill chain and value player Bevilles. That architecture created overlap, additional overhead and brand confusion at a time when consumer demand is softening, and gold and input costs remain elevated. The reset cuts through that complexity. By winding down Medley and folding TenSevenSeven and Watches Galore into Michael Hill and Bevilles, the group is deliberately concentrating firepower on a simple price ladder: Michael Hill in the mid‑to‑high, “below Cartier and Tiffany” space, and Bevilles in value. Management has also acknowledged that around 14 per cent of its global network – and 30 per cent in Australia – currently operates in overlapping catchments, an inefficiency that clearer positioning can start to address through smarter network planning and sharper propositions. Learning from experiments, then scaling what works Importantly, Michael Hill is not abandoning the ideas behind the shuttered brands; it is scaling the parts that proved they resonate with customers. TenSevenSeven validated strong demand for bespoke bridal, with average transaction values more than four times Michael Hill’s typical bridal sale. Rather than carry the fixed costs and marketing burden of a standalone luxury brand, the group is now trialling those bespoke ring‑building experiences inside Michael Hill stores across its global network, where they can leverage existing traffic, store teams and brand equity. The same logic applies to Watches Galore and Medley. Watches Galore was already a pureplay site riding on Bevilles’ watch inventory; integrating it fully into the Bevilles ecosystem removes duplication in platforms and marketing while preserving watch sales. Medley, a pureplay demi‑fine and responsibly sourced jewellery brand, will be wound down, but its customer base will be actively migrated into the core network – giving Michael Hill a chance to fold sustainability‑minded shoppers and product learnings into its mainstream ranges, rather than sustaining a separate, sub‑scale operation. Bevilles reset: fixing value before chasing volume If portfolio rationalisation is the strategy on paper, Bevilles is the proving ground in practice. Since acquiring the chain in April 2023, Michael Hill has relocated Bevilles’ head office and distribution facilities closer to its Queensland base, broadened its product range and begun reshaping its value proposition. The group has also been explicit that Bevilles must “generate returns that justify the capital invested” before further rollout, pausing store expansion while it refines the model, including closing the Charlestown, NSW store in FY26 after challenging trading in core market Victoria. That discipline has a short-term cost. In FY25, Michael Hill recognised a non‑cash $7.4 million impairment of the Bevilles brand intangible asset as part of its annual results, signalling that management is not afraid to reset expectations and clean up the balance sheet. Yet the value strategy is starting to stabilise: same‑store sales in the Australian retail segment, which includes Bevilles, rose 1.2 per cent in FY25 and accelerated to 4.8 per cent in the first half of FY26 and 5.5 per cent in the third quarter, even as gross margin pressure from record gold prices and a promotional market weighed on profitability. Financial discipline and a clearer path to returns Under new CEO Jonathan Waecker, Michael Hill is targeting a 10 per cent EBIT margin by pulling four main levers: improving store productivity, diversifying revenue, lifting gross profit and driving operating leverage. Rationalising the brand portfolio directly supports this ambition by cutting duplicated overheads, consolidating marketing spend, and allowing more precise merchandising and inventory management across a smaller, more defined network. The early numbers suggest this approach is gaining traction. In the first half of FY26, group sales rose about 3 per cent to $371 million, NPAT jumped 32 per cent to $22.3 million, and EBIT improved in double digits, even as gross margin held broadly steady despite rising input costs. In Q3 FY26, group same‑store sales grew 4.6 per cent, and total sales increased 3.8 per cent, with management pointing to “green shoots of recovery” but also acknowledging consumer headwinds and increasing volatility into Q4 and FY27. Crucially, the board has signalled an intent to resume paying dividends with the FY26 full‑year result, subject to trading conditions. The market has echoed that confidence: New Zealand’s Accident Compensation Corporation has lifted its stake in Michael Hill to 5.819 per cent, nearly doubling its holding and crossing the substantial shareholder threshold as the new strategy beds in. For a long‑term institutional investor that emphasises active management and value creation, increasing exposure at this point is a clear vote of confidence in the turnaround. Why rationalisation signals strength, not retreat In a tougher macro environment, many retailers are quietly trimming experiments and cutting capital to survive. Michael Hill’s move is different because it combines simplification with selective scaling of proven concepts, a sharper price architecture and visible financial guardrails. By exiting sub‑scale brands, codifying lessons from TenSevenSeven and Medley, and insisting Bevilles earns its keep before expansion, the group is trading breadth for focus and optionality. For investors, that translates into a clearer story: two brands, distinct customer missions, disciplined capital allocation and a path back to dividend payments backed by improving same‑store growth and margin ambitions. In that context, portfolio rationalisation looks less like contraction – and more like Michael Hill deciding what it wants to be when it grows up. Further reading: Michael Hill axes 60 per cent of its brands to ‘move fast’