Hong Kong jeweler Tse Sui Luen (TSL) recorded a loss for the full fiscal year amid waning appetite for diamond jewelry in China and an increase in shoppers from the municipality purchasing goods while abroad.
The retailer reported a loss of HKD 197.8 million ($25.2 million) for the 12 months that ended March 31, it said Monday. That compared to a loss of HKD 374.2 million ($47.7 million) a year earlier.
The company attributed the result primarily to the downturn in consumer demand for natural-diamond jewelry, especially on the mainland, as well as changes to buying patterns in Hong Kong. Consumers in the municipality have been traveling abroad to buy luxury goods, forcing the company to close many underperforming stores. High gold prices also deterred purchases.
The company cited a persistent “downward trend” in the jewelry industry, “mainly contributed by significant decline in consumer demand for natural-diamond jewelry, especially in the mainland market,” it said. Hong Kong “continues to decline due to the ongoing trend of northbound travel to the mainland and outbound travel to other countries of local residents,” it added “Such continuing and drastic changes in the local retail landscape forced the group to close certain underperforming retail stores in Hong Kong during the year.”
Group revenue for the year fell 35% to HKD 1.71 billion ($218.1 million). In Hong Kong and Macau, sales slid 41% to HKD 485.7 million ($61.9 million). Sales on the mainland dropped 37% to HKD 1.06 billion ($135.6 million).
During the year, the company reduced its employee count by 40% to save money, as it dealt with worries over its viability as a business. TSL “breached certain financial covenants” for some of its banks loans, it continued.
“In view of the…circumstances, the directors of the company have given careful consideration to the future liquidity and performance of the group and its available sources of finance in assessing whether the group will have sufficient resources to continue as a going concern,” it said. However, it believes it will have enough to see it through to March 2026.
The jeweler will also “drastically” reduce the amount of diamond jewelry it carries in its stores, it stated.
“The group expects that the recovery of [the] retail consumer market will be at times patchy, with comparative slower speed in [the] luxury retail segment,” it commented.
Image: A TSL store in Kuala Lumpur, Malaysia. (Shutterstock)
