Chow Tai Fook, the largest jewellery retailer in China with more than 5,900 stores, has noted a significant decrease in sales following the release of its financial report for the third quarter.
Sales declined by 19 per cent year-on-year for the period ending 31 December, a disappointing outcome following a strong second quarter.
Retail sales decreased by 20 per cent in stores located in mainland China, while in Hong Kong and Macau, sales declined by 11 per cent.
Same-store sales of gold products (36 per cent decline) were the hardest hit category while gemstone-set jewellery (32 per cent decline) also struggled in mainland locations.
Luk Fook struggles
Hong Kong retailer Luk Fook reported similar issues with same-store sales decreasing by 10 per cent in the third quarter.
“Due to the rebound in gold prices and the severe pandemic on the mainland, sales turned from a positive to negative growth, despite a solid retail sales performance and a relatively lower base as compared with the first half of the financial year,” the Luk Fook statement reads.
In contrasting outcomes, same-store sales in Hong Kong increased by 13 per cent while decreasing by 45 per cent in Macau. In mainland China Luk Fook’s same-store sales declined by 35 per cent.
Luk Fook’s total retail sales decreased by 27 per cent. Same-store sales of gemstone-set jewellery declined by 38 per cent in mainland China as the product category most impacted. Same-store sales of gold jewellery declined 33 per cent.
Luk Fook has more than 2,800 points of sale worldwide and plans to open a further 500 stores this year.
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