Luk Fook Sales Drop Due to Trade War

RAPAPORT… Luk Fook’s same-store sales decreased 10% in
the first fiscal quarter amid an unfavorable comparison with last year and the impact of the US-China
tariff war.

Total same-store sales — at Luk Fook outlets open for more
than a year — in Hong Kong and Macau dropped 10% in the three months ending June 30. Same-store gold sales plunged 20%, while gem-set jewelry purchases
grew 6%. Although the average selling price for gem-set items declined by a
double-digit figure, this was offset by a large increase in sales volume, the
company said Monday. The figures are for shops it operates itself, but exclude franchises.

Overall same-store sales in mainland China slipped 7%, with
revenue from gold products falling 4% and gem-set jewelry dropping 7%.

The figures look weak in comparison with the equivalent period last year, when same-store sales increased 22%. Luk Fook also noted “the continuing impact of [the] US-China trade war on market sentiment.”

At the end of the quarter, Luk Fook had 208 self-operated
stores, of which 139 were in mainland China, 47 in Hong Kong, 11 in Macau and
11 in other locations. The retailer also has 1,653 licensed shops.

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