Chow Tai Fook Jewellery Group Ltd. plans to expand in the U.S. market by selling diamonds to retailers there, as it seeks to offset effects of a slowdown in China that has hurt luxury sales and led profits to plunge.
The world’s largest publicly traded jewelry chain plans to start the new U.S. wholesale business within a year and has set up a team to conduct feasibility studies, Chow Tai Fook Managing Director Kent Wong said.
Unlike the company’s U.S. unit Hearts on Fire, which mainly sells its own-branded diamond jewelry to franchisees, Chow Tai Fook will sell polished and rough diamonds to other retailers, he said.
”We are interested in the U.S. market because it has the largest demand for diamonds in the world. It contributes to 40 percent of diamonds sales,” said Wong in an interview.
Chow Tai Fook in 2014 bought Hearts on Fire for $150 million in a bid to introduce the U.S. luxury diamond brand to mainland China, a move that’s met challenges as the country’s slowdown damped the buying habits of high-end consumers.
The Hong Kong-based retailer saw net income slump 46 percent for the year ended March 2016, as Chinese tourists also began to skip the city for other shopping destinations.