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Luk Fook Sales Rise Amid Hong Kong Rebound

November 30, 2023  |  Joshua Freedman
Luk Fook store HK 1280 USED 301123

Hong Kong-based jeweler Luk Fook saw revenue and earnings jump in the first fiscal half as the municipality’s tourist revival outweighed weakness in mainland China.

The company also benefited from strong gold sales, which compensated for ongoing sluggish diamond demand on the mainland, it said Wednesday.

Group revenue rose 34% year on year to HKD 7.49 billion ($958.5 million) for the six months that ended September 30, with net profit up 43% at HKD 942.6 million ($120.7 million), the retailer reported. The figures align with a provisional estimate the company gave last week.

Hong Kong’s luxury sector has rebounded following the reopening of its border with the mainland earlier this year. Chinese tourists were able to visit the municipality — and part with their cash — following three years of disruptions due to the Covid-19 pandemic.

Luk Fook, which is more exposed to the local market than rival Chow Tai Fook, saw sales in Hong Kong, Macau and overseas jump 67% year on year to HKD 4.83 billion ($618.4 million) for the period. Sales on the mainland fell 0.7% to HKD 2.66 billion ($340 million).

The momentum in Hong Kong and Macau continued into the second fiscal half, Luk Fook noted, with same-store sales — at self-operated stores open for at least a year — growing 50% in October and the first three weeks of November. Mainland sales at self-operated and licensed shops were “nearly flat” in October, with double-digit growth in the first three weeks of November, the company added.

However, with mainland diamond demand “subdued,” Luk Fook will actively promote non-diamond, fixed-price jewelry products, especially in gold, it said.

“Moreover, the group is optimistic about the immense growth potential in the overseas markets and intends to proactively allocate more resources to expand its footprint across the world,” it said.

Main image: A Luk Fook store in Hong Kong in 2019. (Shutterstock)

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