Luk Fook Bounces Back as Hong Kong Recuperates

RAPAPORT… Luk Fook saw a return to strong sales in the second fiscal quarter as the coronavirus situation in Hong Kong eased.

Same-store sales at self-operated shops jumped 105% year on year during the three months ending September 30, the Hong Kong-based jewelry retailer reported in a recent trading update. Sales by that metric — which excludes stores that opened in the past year — surged 109% in Hong Kong and Macau, outpacing figures in mainland China.

The growth reflected a favorable comparison with the Covid-19 slowdown a year earlier and “effective control” of the pandemic, Luk Fook explained. Its Hong Kong business benefited from stronger consumer sentiment, it added.

The pandemic has devastated luxury retail in Hong Kong and Macau, because both markets rely on tourist spending. While overseas visitors continue to stay away due to strict quarantine rules, local demand has picked up as the infection rate has stabilized. The government has handed out vouchers to encourage consumer spending.

Meanwhile, same-store sales at self-operated branches in mainland China leaped 62% year on year. At licensed shops, which accounted for around 97% of all mainland stores, growth was 35%. E-commerce revenues in that region, which are also not included in the company-wide total, increased 65%.

Image: A Luk Fook store in Hong Kong. (Shutterstock)