China Recovery Boosts Chow Tai Fook

RAPAPORT… Chow Tai Fook’s sales surged in the fourth fiscal quarter amid the reopening of the greater China economy and a return of consumer demand.

Retail sales soared 174% in mainland China in the three months ending March 31, while same-store sales — at branches open for at least year — jumped 141%, the jeweler reported last week. In Hong Kong and Macau, retail sales climbed 47%, while same-store sales rose 31%. Same-store sales only include shops that Chow Tai Fook operates itself, as opposed to franchises.

Gold-jewelry sales grew 160% on a same-store basis on the mainland and 7% in Hong Kong and Macau. Same-store sales of gem-set jewelry went up 80% in China and 63% in Hong Kong and Macau.

The strong increases in both markets was due to an “exceptionally” low base of comparison to the same period a year ago when stores were closed due to the Covid-19 outbreak. Rising consumer sentiment and a decrease in the price of gold also buoyed sales in mainland China, the company noted. Although sales in Hong Kong rose versus a year ago, they were held back by a challenging economic environment and the closure of major border crossings, which impeded tourism.

Chow Tai Fook opened a net 150 outlets in mainland China and closed one in Taiwan during the January-to-March period. The retailer operated 4,591 locations at the end of the quarter.

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