Michael Hill to pay $2.26m in damages after packaging dispute

The news: Jewellery retailer Michael Hill has been ordered to pay damages of $2.26 million by the NSW Supreme Court following a dispute over the supply of packaging between 2014 and 2018.

The numbers: In January, Michael Hill posted disappointing first-half results, reporting earnings before interest and tax of $30-$33 million, down from $58.9 million during the prior corresponding period. The Brisbane-based retail group, which cut its global stores in Australia, Canada and New Zealand from 304 to 302 in the first half, saw its share price drop 22% over the past year.

The context: In a further setback for the retailer, the NSW Supreme Court ruled that it breached three obligations under sales agreements with packaging manufacturer Gispac which supplied carry bags to Michael Hill between 2014 and 2018. Michael Hill, which has been ordered to pay damages of $2.26 million plus interest and costs to Gispac, said it is considering the judgement and its appeal options.