Pandemic Pinches Luk Fook Revenue

RAPAPORT… Luk Fook’s revenue and profit fell in fiscal 2020 as the coronavirus and social unrest in Hong Kong hampered sales.

Overall revenue for the Hong Kong-based jewelry retailer dropped 29% to HKD 11.23 billion ($1.45 billion) for the year ending March 31, it reported last week. Net profit plunged 42% to HKD 867.7 million ($112 million).

The company’s retail revenue in mainland China slid 28% to HKD 1.74 billion ($224.5 million), while same-store sales at branches open for at least a year fell 20%. The company was forced to close stores during part of the year as a result of Covid-19. Low consumer sentiment because of the US-China trade war also affected sales, it said.

In Hong Kong, the jeweler’s revenue declined 43% to HKD 4.27 billion ($551.2 million), with same-store sales slumping 33%. Ongoing protests against the government had a strong impact on sales, as did a virtual halt to tourism caused by the pandemic.

Group same-store sales fell 32%. In addition to Hong Kong and China, the company has operations in markets including Macau, Singapore, Malaysia, the Philippines, Cambodia, the US, Canada and Australia.

Same-store sales of gold and platinum products dropped 33%, the retailer reported, while those for gem-set jewelry items decreased 29%. Total sales of gold and platinum products plummeted 36% to HKD 5.01 billion ($646.7 million), constituting 48% of overall sales. Gem-set jewelry sales fell 25% to HKD 5.42 billion ($699.3 million), accounting for the remainder of the total.

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