Bleak New Year for Chow Tai Fook
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Chinese New Year sales for the Chow Tai Fook Jewellery Group took a dive in Mainland China, Hong Kong and Macau.
Unaudited figures for the period, from January 25 to February 14, show the value of retail sales dropped 30 per cent in China and 23 per cent in Hong Kong and Macau – a 29 per cent dip for the group – compared with the previous Chinese New Year.
Same-store sales dropped 31 per cent in China, 22 per cent in Hong Kong/Macau, and 28 per cent for the group. Same-store sales figures were also broken down into product – gem-set jewellery dropped 30 per cent in China, 3 per cent in Hong Kong/Macau, and 20 per cent for the group, while gold products fell 33 per cent in China, 25 per cent in Hong Kong/Macau, and 31 per cent for the group.
Chow Tai Fook says the plunge in China was mainly because of more outbound travel from the mainland during the celebration, and a weakening of consumer sentiment for luxury goods because of the economic slowdown and volatility in the stock market.
It attributes the decrease in Hong Kong and Macau to the drop in mainland tourists to Hong Kong as well as continuing weak retail sentiment in both regions.
“Management anticipates the retail business environment will continue to be challenging for the fourth quarter and the sales performance will be worse than that of the third quarter,” the company said a statement.
Questions & Answers
Q.What was the overall decline in retail sales value for Chow Tai Fook during the Chinese New Year period?
What was the overall decline in retail sales value for Chow Tai Fook during the Chinese New Year period?
The group experienced a 29 per cent drop in the value of retail sales. This includes a 30 per cent decline in Mainland China and a 23 per cent fall in Hong Kong and Macau compared to the previous Chinese New Year.
Q.Which product category saw the largest decrease in same-store sales across the group?
Which product category saw the largest decrease in same-store sales across the group?
Gold products recorded the largest decline in same-store sales for the group, falling by 31 per cent. This compares to a 20 per cent drop for gem-set jewellery across all regions combined.
Q.What reasons did Chow Tai Fook give for the sales decline in Mainland China?
What reasons did Chow Tai Fook give for the sales decline in Mainland China?
The company attributed the plunge in China mainly to increased outbound travel by mainland residents during the celebration. A weakening of consumer sentiment for luxury goods due to the economic slowdown and stock market volatility also contributed.
Q.What is the company's outlook for the retail business environment in the upcoming quarter?
What is the company's outlook for the retail business environment in the upcoming quarter?
Management anticipates the retail business environment will remain challenging for the fourth quarter. They expect sales performance to be worse than that recorded in the third quarter.
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