Luk Fook China Sales Slide in Latest Covid-19 Wave

RAPAPORT… Luk Fook’s sales weakened in the past months as Covid-19 dampened retail spending across greater China, the Hong Kong-based jeweler reported.



Group same-store sales — in Hong Kong and the mainland — declined in March and April amid a resurgence of the virus in both locations, the retailer said Tuesday. Same-store sales in Hong Kong and Macau returned to “slight” growth for the period from April 1 to June 21 as the outbreak eased and the Hong Kong government distributed spending vouchers, the company added.



Same-store sales on the mainland fell around 15% for the period from April 1 to June 21, including at self-operated and licensed shops, reflecting the impact of lockdowns in the country.



The downturn followed a strong fiscal 2022: Group revenue rose 33% to HKD 11.74 billion ($1.5 billion) for the 12 months ending March 31 as the market bounced back from the previous year’s virus-induced slump, Luk Fook noted. Profit jumped 37% to HKD 1.39 billion ($177.4 million) for the period.



“However, with the resurgence of the pandemic in Hong Kong and mainland in February and March 2022, respectively, the group’s overall same-store sales from March to April 2022 recorded a decline again,” the company explained.



While the pandemic remains a factor, the jeweler is still targeting double-digit revenue growth for the coming year as it expands its retail network and China relaxes its Covid-19 measures, it said.




Image: A Luk Fook store at the MixC World shopping mall in Shenzhen Bay, China. (Shutterstock)