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Sales at Hong Kong-based jeweler Luk Fook spiked 26% year on year in the fiscal third quarter, significantly surpassing predicted results in all markets.
Mainland China, as well as Hong Kong, Macau, and other overseas locations in which the brand operates, saw a strong performance for the three months that ended December 31, the company said last week. Gold prices reached new highs in December, but with minimal effect on sales performance as consumers adapted to the rising rates.
“Following the implementation of the new value-added tax policies on gold in the mainland, the widened product price differential between the Hong Kong and Macau market and the mainland market has attracted more consumers to purchase gold products in Hong Kong and Macau, thereby benefiting retail performance in the Hong Kong and Macau market,” Luk Fook explained.
Group same-store sales gained 15% overall during the October-to-December period, while same-store sales of fixed-price gold products advanced 32%, and fixed-price jewelry grew 17%.
In China, retail sales increased 26% year on year versus 20% in the second quarter. Same-store sales climbed 7%. Meanwhile, in Hong Kong and Macau, overall sales improved 20%, with same-store sales up 16%.
Same-store sales of gold products slid 2% on the mainland, a drop from the 3% rise in the second quarter. Fixed-price jewelry surged 56% overall, while fixed-price gold soared 93%. In Hong Kong and Macau, same-store sales of gold products jumped 17%. Fixed-price jewelry rose 14%, and fixed-price gold increased 27%.
“Amid rising geopolitical risks and persistent China-US tensions, the mainland government has been vigorously promoting domestic demand and introducing multiple supportive policies for the property and capital markets,” the company noted. “As such, the group remains cautiously optimistic about its medium- and long-term business prospects [on the] mainland and will continue to expand in the mainland market at appropriate time in the future.
At the end of the quarter, the group’s global network numbered 3,073 shops, with a net decrease of 40 stores. However, Luk Fook opened nine new locations overseas — in Thailand, Vietnam, the US and Cambodia. The group will allocate additional resources to expand its global presence and plans a net increase of approximately 15 overseas stores during the current financial year.
Image: Luk Fook store in Hong Kong. (Shutterstock)
