China Growth Rescues Chow Tai Fook Sales

RAPAPORT… Sales at Chow Tai Fook were down only slightly in the first fiscal half as growth in the Chinese market offset a downturn in Hong Kong.



Revenue fell 0.6% year on year to HKD 29.5 billion ($3.77
billion) in the six months ending September 30, the company said Thursday. Total
sales in mainland China rose 12% during the period, as the Hong Kong-based
jeweler expanded its store network. Same-store sales — at branches open for at
least year — grew 1.8%. Sales in China made up 69% of the group’s revenue, the
company said.


Meanwhile, total sales in Hong Kong and Macau dropped 20% as
political unrest and rising gold prices weakened consumer sentiment. Same-store
sales for the region plunged 28%, excluding licensed shops. Group profit fell 21% to HKD
1.58 billion ($201.8 million).


“Mainland China continued to be our main contributor, and
accounted for around 81% of the group’s core operating profit, while Hong Kong,
Macau and other markets registered a significant decline in core operating
profit by 26% due to the uncertain situation in Hong Kong,” the company noted.


Gold sales in mainland China slipped 2% on a same-store
basis, and plummeted 33% in Hong Kong and Macau. Sales of gem-set jewelry rose
4.1% on the mainland, but slid 25% in Hong Kong and Macau.


During the period, Chow Tai Fook opened a net 333 new
locations in mainland China, and three in Hong Kong and Macau.

Image: A Chow Tai Fook store in Hong Kong. (Chow Tai Fook)