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Hong Kong-based jeweler Tse Sui Luen (TSL) saw revenue drop in the first fiscal half as a rise in the gold price compounded China’s already challenging conditions.
Sales fell 15% year on year to HKD 731.9 million ($94 million) for the six months that ended September 30, the company reported Tuesday. Sales in mainland China, its biggest market, slumped 25% to HKD 412.4 million ($53 million). Hong Kong-based revenue climbed 3% to HKD 244.2 million ($31.4 million).
“The worldwide geopolitical tension, the persistently stagnant global economy and record-breaking gold price…greatly affected…consumers’ spending behavior and market sentiment throughout the period,” management explained. “The recovery of [the] global luxury retail market, especially in the mainland and Hong Kong, was very slow.”
Weak appetite for diamonds and closures of loss-making stores contributed to the declines.
“In addition to the softening demand of natural-diamond jewelry, the sales momentum of 24-karat gold products was impacted by the rapid rise in gold price during the period,” the company added.
TSL’s net loss narrowed by 19% to HKD 35.3 million ($4.5 million). The company breached certain financial covenants for some of its bank borrowings and facilities but obtained “amended or restated” lending agreements and waivers. It is also embarking on a restructuring and cost controls and is “cautiously optimistic” amid the challenges of US tariffs and geopolitical tensions.
“With steadfast commitment, we are determined to turn around the business and refine its strategies to transform the whole organization to get well-prepared for achieving sustainable growth in mid to long term,” it said.
Image: A TSL store in Hong Kong. (Shutterstock)
