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Sales at Hong Kong-based jeweler Luk Fook began to rebound in the second fiscal quarter amid a resurgence in demand, as the jeweler made plans to broaden its business overseas.
Total sales jumped 18% compared with the same period a year ago for the three months that ended September 30, the company reported Tuesday. Same-store sales — at self-operated shops open for at least a year — climbed 10%.
The retailer attributed a large portion of the growth to a 40% rise in the price of gold during the period. Although strong prices for the yellow metal have dampened consumer sentiment in the past, Luk Fook believes shoppers are getting used to rising prices and are returning to purchasing, meaning the average selling price of these products is higher. Additionally, while demand for diamond products is still low, it has picked up from the previous year.
In Hong Kong and Macau, sales rose 13%, and on the mainland they jumped 20%. Same-store sales of gold — priced by weight at international market rates — advanced 6% year on year during the quarter, while “fixed-price jewelry,” which refers to products sold at prices determined by the retailer, gained 27%. Same-store sales of fixed-price gold products surged 68%, while fixed-price diamond goods slipped 9%.
Same-store sales of gold products rose 3% in China, and fixed-price jewelry gained 8%. Same-store sales of fixed-price gold products shot up 49% on the mainland, with fixed-price diamond goods falling 31%.
In the second quarter, the company closed a net 49 shops, leaving it with a total of 3,113 locations. During the first half of the year, Luk Fook opened eight new overseas shops, entering Vietnam for the first time. In light of the new US tariff policies, and the “heightened tensions” in US-China relations, the jeweler plans to expand further overseas and open approximately 20 international stores by the end of the fiscal year, it said.
Post-second quarter, in the two weeks from October 1 to 14, sales have outperformed those of the second quarter, with Hong Kong, Macau and other overseas markets soaring 19% and China increasing 16% for self-operated stores and 51% for licensed shops, the company added.
