Sales at Chow Tai Fook fell in the first fiscal quarter as surging gold prices and economic challenges dented consumer demand for jewelry.
Retail sales across the group decreased 20% year on year for the three months that ended June 30, the Hong Kong-based jeweler reported last week. Sales slipped 17% on the mainland and were down 29% in Hong Kong and Macau. Sales in China comprised 88% of total revenue, while Hong Kong and Macau made up 12%.
“During the first quarter, both mainland China and Hong Kong and Macau recorded negative [sales growth] as macro challenges continued to impact consumers’ spending,” the company commented. “Coupled with gold-price volatility at high levels, we witnessed hiccups in gold-jewelry demand in the quarter.”
Same-store sales — at branches open for at least a year, excluding franchises — declined 26% in China. In Hong Kong and Macau, same-store sales plunged 31%. Same-store sales of gold jewelry fell 28% on the mainland, dropping 33% in Hong Kong and Macau. Meanwhile, demand for diamond jewelry also took a hit. During the quarter, sales of gem-set jewelry decreased 32% in China and 31% in Hong Kong and Macau.
Over the three months, Chow Tai Fook closed a net 91 stores in mainland China, while Hong Kong and Macau saw no net change. The group’s total stands at 7,754 points of sale.
Image: A Chow Tai Fook store in China. (Shutterstock)
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