Hong Kong-based jeweler Luk Fook saw sales rise in the second fiscal quarter as tourists returned to the municipality in search of luxury items.
Same-store sales — at self-operated shops open for at least a year — jumped 31% for the three months ending September 30 compared with the same period a year ago, the company reported Wednesday.
Hong Kong’s border with the mainland reopened to tourists in January, while the territory’s government removed local restrictions. The municipality derives much of its luxury revenue from visitors — primarily from China — who travel there to purchase goods.
The retailer also attributed the growth to strong sales over the National Day Golden Week holiday as well as its decision to carry a greater proportion of gold products, which are more popular than diamond jewelry.
“Given the decreased demand for diamond products [on the] mainland, the group will continue to actively promote non-diamond fixed-price jewelry products, especially fixed-price gold products, in order to improve…performance,” it said.
The 41% increase in Hong Kong and Macau outweighed an 8% dip on the mainland resulting from a challenging economic situation and subdued consumer sentiment, the company explained.
Luk Fook’s same-store sales of gold — priced by weight at international market rates — grew 30% year on year during the quarter, while “fixed-price jewelry,” which refers to products sold at prices determined by the retailer, was up 36%. Overall, sales of fixed-price gold products increased 76%, while fixed-price diamond goods rose 19%.
“Since the full reopening of borders amongst Hong Kong, Macau and mainland…the Hong Kong and Macau market has shown consistent improvement,” Luk Fook noted. “The macroeconomic in the mainland market showed no signs of improvement and its consumption sentiment exhibited a slower recovery compared to the Hong Kong and Macau market…. This year marked the first National Day Golden Week after the return to normalcy following the pandemic. During this Golden Week period…the Hong Kong and Macau market sustained growth momentum.”
Main image: A Luk Fook store in Hong Kong. (Shutterstock)