Retail sales at Hong Kong-based jeweler Chow Tai Fook fell 21% year on year in the second fiscal quarter as record gold prices discouraged consumers.
A lack of tourism and a drop in local consumption while people were on summer vacations also impacted the jeweler, it said last week. In addition, sales during the three months that ended September 30 suffered from a weak comparison with the same period a year ago, as consumers purchased less jewelry for China’s Golden Week holidays, which began October 1.
Retail sales in Hong Kong and all other non-mainland markets, which account for 12% of the company’s total revenue, slipped 31%. In China — which constitutes the remaining 88% — sales fell 19%.
Same-store sales saw a 31% year-on-year decline in Hong Kong and Macau. Sales in Hong Kong fell 28%, while Macau experienced a steeper drop of 40%. On the mainland, same-store sales slid 24%.
“During the second quarter, macroeconomic externalities, particularly record gold prices, continued to weigh on consumer sentiment” the retailer said. “In Hong Kong and Macau, the market was impacted by the local outbound travel in summer and the change in spending patterns and preferences among mainland tourists.”
Despite these factors, China’s decline was softer than in the first quarter, while Hong Kong and Macau’s remained on par, the company explained. The change was the result of increased sales during the holiday period, as well as an improvement in the demand for gem-set jewelry on the mainland.
Meanwhile, same-store sales of gold products — including jewelry — dropped 25% in China, while gem-set jewelry and similar items fell 28%. In Hong Kong and Macau, gold products were down 36% and gem-set jewelry decreased 17%.
Image: A Chow Tai Fook store in Hong Kong. (Shutterstock)
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