Michael Hill International is to expand into the United States market.
The Brisbane-based jeweller is to buy 17 stores from Whitehall Jewelers for about $NZ7 million.
Whitehall is in Chapter 11 bankruptcy, which protects it from creditors and allows it to keep trading while it restructures its business.
Michael Hill says the stores in Illinois and Missouri will provide a launching pad into the large US market. Most of the stores are in Chicago, with two stores in St Louis.
With the US economy close to stalling, Michael Hill sees this as a test of its retail model, and does not expect these stores to be profitable for several years.
But it says the opportunity to get into the American market on what it sees as favourable term was to good to pass up.
The jeweller says buying a cluster of stores allows it to save money through lumping together logistics, marketing and managment supervision costs.
It hopes to close the deal by 9 September.
Shares in Michael Hill were down 3 cents to 88 cents on Friday morning.
Last week, Michael Hill International reported a rise of 20% in annual profit to $25.2 million in the year to June.
Revenue rose 8% to $377 million as it added a net 10 stores in Australia, another two in New Zealand, and a further six in Canada.
