RAPAPORT… Retail sales at Chow Tai Fook grew 2.6% year on year in the second fiscal quarter as a strong recovery in China outweighed continued weakness in Hong Kong.
Sales rose 21% on the mainland while slumping 52% in Hong Kong and Macau during the period ending September 30, the jewelry retailer reported Thursday. Same-store sales — at branches open for at least a year — increased 11% in mainland China and slid 53% in Hong Kong and Macau.
The coronavirus pandemic has hit Hong Kong’s largest jewelry chain mainly in its home city, where a tourism slowdown has ravaged local sales of luxury goods. However, consumers in China have become more focused on domestic spending instead of travel retail, leading to the sales surge.
“In light of the easing Covid-19 situation in mainland China, business in mainland China showed an encouraging improvement,” the company explained. “Challenging macros and the closure of key border crossings weighed on the retail demand in Hong Kong and Macau during the quarter.”
Image: Chow Tai Fook store in Chengdu, China. (Shutterstock)
China Resurgence Lifts Chow Tai Fook
The Bottom Line
- Mainland China sales increased 21% year over year, with same-store sales up 11%.
- Hong Kong and Macau sales dropped 52%, with same-store sales down 53%, impacted by tourism decline and border closures.
- The easing of Covid-19 restrictions in mainland China boosted domestic consumer spending, offsetting challenges in other regions.
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