Gem giants in mixed sales

Business | Avery Chen 18 Apr 2019

The jewelry sector is showing a mixed picture, with retail giant Chow Tai Fook (1929) seeing an increase in business as Luk Fook (0590) continued to incur negative growth in same-store sales in the first quarter.

Chow Tai Fook reported a 9 percent year-on-year increase in same-store sales in the mainland and

1 percent growth in Hong Kong and Macau.

That comes as retail sales value rose 24 percent in the mainland and increased 7 percent in Hong Kong and Macau.

The company said its mainland business outperformed Hong Kong and Macau amid a more favorable comparison base. Both markets continued to show a positive growth in selling price.

In the mainland, same-store sales of gem-set jewelry were flat, but gem-set jewelry sales in Hong Kong and Macau decreased by 10 percent.

Sales of gold products rose 14 percent in the mainland and 3 percent in Hong Kong and Macau, helped by an improvement in average selling price and a new collection.

During the first quarter, Chow Tai Fook opened 47 stores in mainland China and two in Cambodia and Vietnam. The company had 3,134 points of sale in total.

Meanwhile, Luk Fook recorded a 6 percent year-on-year decline in same-store sales from January to March, compared with 10 percent drop in the previous quarter, due to improved market sentiment with easing of the Sino-US trade tension, rebound of the renminbi, and recovery of the stock and property markets.

Sales fell 6 percent for gold products and 4 percent for gem-set jewelry products year on year.

Sales in the mainland rose 2 percent, a turnaround from a decline of 14 percent of the last quarter. Gold products rose 4 percent and gem-set jewelry 3 percent.

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