The COVID-19 pandemic and ensuing government restrictions on public gathering have continued to wreak havoc on China’s jewellery retail sales.
Chow Tai Fook, the largest jewellery retailer in China with more than 5,900 stores, has noted a significant decrease in sales following the release of its financial report for the third quarter.
Sales declined by 19 per cent year-on-year for the period ending 31 December, a disappointing outcome following a strong second quarter.
Retail sales decreased by 20 per cent in stores located in mainland China, while in Hong Kong and Macau, sales declined by 11 per cent.
Same-store sales of gold products (36 per cent decline) were the hardest hit category while gemstone-set jewellery (32 per cent decline) also struggled in mainland locations.
Luk Fook struggles
Hong Kong retailer Luk Fook reported similar issues with same-store sales decreasing by 10 per cent in the third quarter.
“Due to the rebound in gold prices and the severe pandemic on the mainland, sales turned from a positive to negative growth, despite a solid retail sales performance and a relatively lower base as compared with the first half of the financial year,” the Luk Fook statement reads.
In contrasting outcomes, same-store sales in Hong Kong increased by 13 per cent while decreasing by 45 per cent in Macau. In mainland China Luk Fook’s same-store sales declined by 35 per cent.
Luk Fook’s total retail sales decreased by 27 per cent. Same-store sales of gemstone-set jewellery declined by 38 per cent in mainland China as the product category most impacted. Same-store sales of gold jewellery declined 33 per cent.
Luk Fook has more than 2,800 points of sale worldwide and plans to open a further 500 stores this year.
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