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Diamonds – A Girl’s Best Friend and Teacher!
Emma Hill
Think that having the country’s highest profile jeweller as your dad makes life easy? Not if you are the daughter of jeweller Michael Hill
Carlson’s Fashion-Embossed Circle
Tanya Carlson
Starting her career making fabulous one-off frocks and now, with the Carlson label firmly established, Tanya has the opportunity to return to her true calling
Write It Down Before You Get Stung
Entering into a formal contractual arrangement with your joint-venturer
Her Inspiration
Diamonds – A Girl’s Best Friend and Teacher!
Emma Hill
Think that having the country’s highest profile jeweller as your dad makes life easy? Not if you’re Emma Hill, daughter of jeweller Michael Hill.
The road to retail nirvana in the jewellery trade is not paved with gold and diamonds as you might think. Rather, it’s a lot of hard work in sub-zero temperatures and making, but learning from, copious mistakes made along the way. But this hasn’t deterred Emma Hill, the 35-year old daughter of jeweller Michael Hill, who is slowly but surely following in her father’s rather large footsteps.
After living in Canada for a number of years and setting up a chain of Michael Hill jewellery stores there, Emma is New Zealand-bound with her new husband, Doug Jacques. The plan is to settle here so Emma can concentrate on her new role as a Board member of the rapidly expanding Michael Hill Jewellers chain. Doug will oversee the family’s non-retail assets.
For Emma, the journey to Canada hasn’t been easy, although it did start out that way. Born and raised in Whangarei, Emma coasted along at school, performing well without much effort. Until, at 16, the Michael Hill business expanded into Australia and the Hill family moved there too. Unceremoniously dumped out of her comfort zone, Emma suddenly found herself at a private girls’ school and no longer the star pupil.
She buckled down and after several years of hard work she graduated from university with a Bachelor of Commerce degree. After a year-long OE, Emma joined the family firm. Five years on, she decided to take a year off to do an MBA – where she graduated at the top of the class. Meeting students from other walks of life and backgrounds opened her mind and expanded her thinking, she says.
So much so that Emma couldn’t see an immediate role for herself back at Michael Hill Jewellers. Instead, she moved to Sydney and took a job with a marketing company. This exposed her to different industries and is the only significant job she’s had outside Michael Hill Jewellers. Not that she wants to be anywhere else. Even now she’s head over heels in love with the company and the jewellery business, a result of having being brought up in it.
When she was a young girl, her parents worked in the Whangarei store every day so she hung out there too, cleaning counters and emptying bins. By 13 she was working in the store on Saturday mornings learning the fundamentals of selling. “Money was tight when I was young,” she says. Her mother sewed the family’s clothes and made everyone’s lunches. This tendency towards thrift still lingers. “I hate putting money in parking meters and I make my own lunch,” she admits.
Emma is the third generation of her family to go into the jewellery business. Michael spent nearly 20 years working for his uncle before venturing out under his own name. So how does she maintain the passion? “It’s in the blood,” she says.
There’s no doubt she’s enamoured of the product as well as the business of selling.
That’s partly because jewellery buying is such a positive experience. “We buy jewellery to celebrate momentous events in our lives – graduations, promotions, engagements, weddings, anniversaries, birthdays and many other occasions. You don’t see people buying jewellery for negative events such as injury, illness or worse.”
She realises that it’s easy to lose touch with customers, staff and products if she hides away in her office, which is why she likes to be on the shop floor as much as possible. She admits this has become more of a challenge the higher up the corporate ladder she climbs.
Emma has never been shown any favouritism by her father, in fact, because of her surname she’s had to work harder than many others. When she returned from her stint in Sydney she applied for two jobs at Michael Hill Jewellers, but was turned down. Wondering whether working in the family business was right for her, she considered setting up her own business. But the lure of Michael Hill Jewellers was too strong and when the opportunity arose to set up the chain in Canada, she had her bags packed in a jiffy. “I’ve always been made to prove myself,” she says, without a hint of regret.
Michael Hill Jewellers has 190 stores in New Zealand, Australia and Canada. The vision is to have 1000 stores by 2022. Emma is determined to make that happen. “I’ve always been goal oriented,” she reinforces. Her father says she’s one determined lady, “Very focussed, to the point of making herself ill,” he says.
During Emma’s four years in Canada she opened 16 new stores, and there are more on the way. Moving there wasn’t easy with challenges to meet and mistakes to make. The market is different in Canada which requires changes to the Michael Hill “formula”. Most notably, Canadian women are not as independent as we Kiwis and Aussies. Men make most of the purchasing decisions, even about jewellery. But, says Emma, this is changing as Canadian women become more educated and start buying jewellery for themselves. For a retailer, this translates into having to build a level of trust and establish a relationship with customers before they’ll buy. Instead of a sales assistant merely taking the money and wrapping the goods, they’ll ask what occasion the item is being bought for, they will talk about the customer’s preferences and tastes, and generally find out a bit about them.
When the newest store opened in Alberta in December, the outside temperature was minus 30°C. Emma was understandably concerned no one would venture out to the opening – despite full page newspaper advertisements and the offer of a one carat diamond for $1. But by opening time 400 people were lined up to get their hands on the opening specials.
Emma firmly believes that the key to being successful in retail is choosing the right people. Her maxim is “You are only as good as the people you have around you.” Emma spends a huge amount of time selecting, interviewing and training her staff.
And she will share with you how Michael Hill Jewellers maintains a culture of success, which she believes may be helpful to other businesswomen.
“We inspire our store managers to act like true business owners. We hire intelligent, energetic, determined people, and train them in the fundamentals of being successful. Then we give them the freedom to make the decisions for their businesses.” Every month each manager is sent a profit and loss report detailing every line of revenue and expense for their business, so they can make informed decisions. To give managers an incentive to act like owners, they are rewarded with a very healthy percentage of the monthly store profit, in addition to a high base salary.
“So, being a Michael Hill Jewellers manager is like owning a franchise but there is no capital outlay. It's a formula that wins hearts and minds – a powerful combination,” says Emma. In retail staying ahead of the competition (as in any other business) is no easy task. “Expansion is the key to realising the vision,” she says. “You have to be constantly innovative in your product design, displays and marketing, and continually evolve the way you’re doing things.”
Emma admits to a burning desire to prove herself. But, she says, it’s also important to be surrounded by friends from successful families. In her opinion “Having the right network helps you think more broadly”.
Emma and Michael share similar personalities. But, says Emma, Michael is a visionary with an ability to cut through the clutter to get to the point. Emma herself is more detail orientated. But Michael tells me he is expecting her to become a visionary, too. On top of setting up the Canadian operation, Emma’s been conducting a feasibility study of the company entering the UK market. Recently elected to the Board of Michael Hill Jewellers, she has her eye firmly on the chairman’s seat, which her father currently occupies. Emma is also aware her biological clock is ticking, another reason for returning home. And the way she talks, it seems highly likely the boardroom might be hearing the pitter-patter of tiny feet ‘further down the track’. Emma’s goal is to help deliver the 1000 stores Michael has his heart set on, hence becoming a member of the board and returning home. “It’s a step up, but I’m aware of the responsibilities,” she says.
The step to becoming chairman is a large one, however, and isn’t likely to happen very soon because, she says, “Dad likes to be busy.”
By Lynnaire Johnston
Her Insight
Carlson’s Fashion-Embossed Circle
Tanya Carlson
As the Carlson label nears its ten-year anniversary, designer Tanya Carlson finds herself completing a fashion-embossed circle. She started her career making fabulous one-off frocks and, now, with the Carlson label firmly established, she has the opportunity to return to creating fabulous frocks for her stores.
The renowned Carlson label was created in 1997, when Dunedin-born Tanya Carlson decided to move from her made-to-measure business to the business of wholesaling collections to New Zealand fashion retailers.
Within four years her label was picked up by Australian department store giant, David Jones. The order of $60,000 was far and above the on-shore orders she had been delivering. The step up on the manufacturing front was significant, but one she took in her stride. “At the time we were doing everything in-house and fabric deliveries were a nightmare. But by having this strong in-house team, we could pull together and deliver things really quickly, and while it wasn’t cost efficient and was extremely labour intensive, we always delivered.” They got through to the other side of the David Jones order - with help from a silent funding partner - and suddenly Tanya Carlson was a big player; no longer so vulnerable to the inconsistencies of the fabric houses and no longer having to do everything in-house.
Tanya Carlson’s future was set. She moved deeper into both New Zealand and Australian markets, and then stretched out to the US. She believes her training at Sydney’s National Art School helped her get over the barriers that fashion always puts in the way of designers. “It was tough. Only 15 of the 45 who started passed in the third year. They were incredibly negative about the fashion industry, saying things like ‘not all of you will make it to be designers in the industry!’ They pulled no punches about what the industry was about. So really, it could only get better for me.”
“At college I worked to support myself. It wasn’t a big shock for me to come out and work hard. I was used to working all hours of the day.”
For nine years, she’s fought the battles of New Zealand’s fashion divas – manufacturing nightmares, training good machinists only to have them leave, finding investors without having to give up her business, and the hurdles that exporting brings. She’s tackled them all and overcome them. But two years ago her best friend died of cancer and that triggered a raft of changes in Tanya’s life. “She was an amazing person. When she died, I was devastated. It made me think about what’s important and what’s not.”
Tanya sold her Portobello cottage and now lives in a rented apartment in Dunedin. She took up surfing. She started to change her business model with the help of her younger sister, Anneliese, who joined Carlson last year. Anneliese is into multi-sport and Tanya believes the discipline this gives Anneliese is bringing Carlson the rigour that it needed.
Anneliese was the driving force behind a recent Tanya Carlson clearance sale, where Dunedin women flocked to get cut-price Carlson pieces. “I would never have done that – I tend to keep too much stock because I can’t bear to put anything on sale. I look at a piece that’s on sale and all I can think of is: ‘That took Margaret two and half hours of embroidering!’ I’m far too attached, whereas Anneliese is ruthless.”
This year sees Tanya working closely with Anneliese to create a strong retail brand and broaden her stores’ market by appealing to a younger demographic, complementing Carlson ranges with labels like Cybele, Juliet Hogan, aduki and Adrian Hailwood. She’s also sharpening her focus on Australasia and pulling back on some of her slow-paying export accounts.
Now nearing her ten-year anniversary, Tanya is at ease with where the business is. “I don’t want world dominance. Success for me is now out the back of the surf, standing up on a surfboard. I got over travelling for work, and I’ve realised what I love about this business is that I actually love making the clothing… I knew that fashion was my future from the age of 14. I had a gift that enabled me to create garments on the mannequin – to cut visually. But I’ve only really just realised how precious my gift is.”
Her talent is appreciated all over the world. New York boutique owner, Elizabeth Charles can’t believe Tanya remains in New Zealand when her calling would fit so perfectly in New York or the fashion houses of Paris. But now Tanya intends to use her gift to its full potential by making one-off creations out of a collection of divine fabrics she’s been hoarding for years.
She has a machinist assigned to her personally three days a week, and for those days Tanya has free rein to create garments that will end up on the shop floor at up to $4000 dollars a pop. “I have developed a clientele who want me to make them a dress. They want a piece of Tanya Carlson, so this is a way of working that desire into the business model.
“At the end of it I’m fundamentally creative. I’ve always enjoyed that part of it. I have a God-given gift – it’s the thing that I can do, visually cutting.”
Tanya began her design life creating one-offs, and now has the space to once more utilise her true calling to its full potential. “It’s very amazing, very weird. I’ve come round the full circle.”
By Rebecca Wilson
Her Inform
Write it Down
Before you get Stung
Had an idea for a business venture but need the help of a friend, longstanding colleague or business partner to get your dream business or project going?
If you do, be warned! If the initial ‘honeymoon period’ doesn’t resolve issues that arise early in the developmental stages of the project, there’s a very good chance obligations will be imposed on you without your agreement if you end up in court.
That’s because, even if you haven’t entered into a formal contractual arrangement with your joint-venturer, you can be held to certain obligations that are considered to be inherent to a joint-venture relationship.
Take the following situation: Phillipa* and Rebecca* were associated in a project to develop a commercial property at a viable central-city site. Both women worked on the project, but Phillipa took principal responsibility for progressing it during the initial stages (as she had done on a previous similar project with Rebecca).
Phillipa entered into an agreement for the purchase of the site, conditional on attracting a major retail tenant. She did so through a company in which her family trust was a major shareholder. When a tenant was secured, the plan became feasible and the agreement was finalised. At that point Phillipa tried to exclude Rebecca, intending to complete the development alone. There was no written agreement between them to pursue the project to its end together.
This is a situation that happened recently, and the Courts became involved when Rebecca attempted to hold Phillipa to her word. The Courts agreed with Rebecca and awarded substantial compensation in the sum of $850,000 for the lost opportunity. The alarming aspect is that the outcome was totally outside the control of both people simply because they began their project on a handshake.
While you may feel that casual arrangements are preferable early in a business relationship, particularly when you are uncertain whether the project will even proceed, you must be careful.
If things turn to custard, you will be in a much better position if you make formal contractual arrangements from the outset so that obligations can’t be imposed on you that you would never have agreed to.
The law has recently been clarified and it is now clear that joint-venturers owe each other what are called ‘fiduciary obligations’, even during the initial stages of a project, and even in situations where the relationship is loose.
‘Fiduciary obligations’ are similar to duties of loyalty and good faith. The courts infer the obligations based on an implicit understanding between joint-venturers that they are depending on each other to make progress towards the common objective. That is, they infer an expectation of loyalty to the joint cause. The extent and nature of the expectation is determined by the courts where there is no clear indication, for instance by way of a written agreement, between the parties.
Therefore, it makes good sense to think ahead and to negotiate the scope of that expectation with your joint-venturer before it is imposed on you. The courts are now unlikely to allow a person to take sole control of the business opportunity, even where that person does all the initial spadework, without some clear indication of a prior understanding between the business partners.
This is not to say that, once started, a project is impossible to withdraw from. But there is a further expectation implied by the courts that the joint-venturers will act fairly toward each other in bringing the affairs of the joint venture to a fair conclusion. Again, what is fair will be determined by the courts in the absence of a contractual arrangement.
So what might the court require you to do if they decide that you’re in breach of your fiduciary obligations to your joint-venturer?
They will hit you in your pocket and likely ask you to pay substantial monetary compensation or damages to your joint-venture partner as the courts did in the situation already outlined. While this is a form of protection for you if it is your joint-venturer who takes off with your business opportunity, the opposite is unfortunately also true - it could leave you paying a good portion of your profit or potential profit should you later decide to pursue the project on your own.
The amount of damages will be determined by the court, based on profit (even if not yet realised). So again, the extent of your obligations is out of your hands if prior arrangements are not made with your joint-venture partner.
While a degree of uncertainty is inherent in creativity and an inevitable aspect of a new business venture, this type of uncertainty is avoidable by taking very simple steps at the start of the project. That is, by putting some expectations down on paper in an agreement. Don’t leave it until you’re standing in court - being ordered to pay a very large sum of money - to learn the extent and scope of your obligations to your joint-venture partner.
By Kirsten Ferguson
*Note: Names have been changed
Kirsten Ferguson is a Solicitor at Rainey Collins Lawyers. Kirsten invites comments and feedback on
kferguson@raineycollins.co.nz or 0800 733 445.
www.raineycollins.co.nz.
