Chow Tai Fook, the Hong Kong-based jeweler, reported a decline in sales during the first fiscal quarter due to rising gold prices and economic challenges affecting consumer demand for jewelry.
According to the company’s recent announcement, retail sales for the group dropped by 20% year-on-year for the three-month period ending June 30. Sales fell by 17% on the mainland China and decreased sharply by 29% in Hong Kong and Macau. Mainland China accounted for 88% of total revenue, with Hong Kong and Macau contributing the remaining 12%.
The company stated, “Both mainland China and Hong Kong and Macau experienced negative sales growth in the first quarter, influenced by ongoing macroeconomic challenges affecting consumer spending.” They added, “High levels of gold-price volatility also contributed to fluctuations in demand for gold jewelry during the quarter.”
Same-store sales, which exclude franchise outlets and include branches open for at least a year, declined by 26% in China and plunged by 31% in Hong Kong and Macau. Specifically, same-store sales of gold jewelry dropped by 28% in mainland China and by 33% in Hong Kong and Macau. Demand for diamond jewelry also faced a downturn, with sales of gem-set jewelry decreasing by 32% in China and 31% in Hong Kong and Macau during the quarter.
During the same period, Chow Tai Fook closed a net total of 91 stores in mainland China, while there was no net change in the number of stores in Hong Kong and Macau. The jeweler now operates a total of 7,754 points of sale across its markets.
