Hong Kong’s biggest jewellery chain is to shutter as many as eight of its key stores by the end of the year, as earnings continue to be battered by dwindling mainland visitors, and lukewarm retail sentiment.
Speaking on local radio, Kent Wong Siu-kee, managing director of Chow Tai Fook Jewellery Group, warned he expected the sector to suffer a further double-digit fall in sales over the next three months.
He also said he thought Hong Kong was losing its shine as an overseas travel destination because of loosened visa policies in the other countries, and the strengthening Hong Kong dollar.
“Seven to eight of our stores, in tourist areas, are set to close in the second half of the year, and those that have renewed their tenancy contracts, even in these populous areas, we have seen their landlords on average slash rents by 40 to 50 per cent this year,” he said.
The low base effect created by last year’s figures, and the onset of the “peak season for weddings”, however, could help narrow Chow Tai Fook’s revenue decline in the coming half, Wong said. The company is also considered the world’s largest publicly-traded jeweller.
On Friday, Chow Tai Fook revealed its unaudited same store sales growth (SSSG) — a crucial gauge of a retailer’s revenue growth — dropped by a fifth from April to June this year in Hong Kong and Macau, while in the mainland it tumbled 17 per cent from a year earlier.
The same day, rival retail chain Chow Sang Sang Holdings International warned the stock exchange, that its net profit for the first six months of the year was expected to slump by 50 to 60 per cent from a year earlier.
(Source: SCMP)