Retail sales at Hong Kong-based jeweler Chow Tai Fook fell in the third fiscal quarter amid overseas spending and continued high gold prices that dented consumer sentiment.
Sales at the company dropped 14% year on year for the three months that ended December 31, it said last week. In Hong Kong and Macau, many consumers are buying jewelry abroad, while tourists from the mainland have changed their spending patterns and are turning away from purchasing luxury products. However, the decline has narrowed somewhat over the course of the fiscal year as gold prices stabilize, Chow Tai Fook explained.
“Macroeconomic externalities and high gold prices continued to weigh on consumer sentiment,” the company noted. “Yet thanks to the stabilization of gold prices…, the magnitude of the same-store sales decline narrowed sequentially in both mainland China and Hong Kong and Macau.
Retail sales slipped 13% in China, which accounts for around 85% of total proceeds. Sales slid 20% in Hong Kong, Macau and other markets.
Same-store sales — at branches open for at least a year — plunged 16% on the mainland. Hong Kong and Macau witnessed a 21% drop. Same-store sales of gold products fell 15% in China, while gem-set jewelry decreased 20%. In Hong Kong and Macau, sales of gold jewelry dropped 36% and gem-set jewelry grew 34%.
“In Hong Kong and Macau, the market continued to be weighed by the local outbound travel and the change in spending patterns and preferences among mainland tourists,” the jeweler added.
During the period, Chow Tai Fook closed a net 259 stores, primarily on the mainland. It currently operates 7,065 points of sale.
Image: A Chow Tai Fook store in China. (Chow Tai Fook)
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