Chow Tai Fook boosts community as gross sales slip
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Chow Tai Fook added 180 new factors of sale within the 2015 monetary yr and says it’s going to proceed to increase regardless of the slip in gross sales.
The corporate now has 2257 factors of sale, largely in Hong Kong, mainland China and Macau.
“Whereas it’s essential to take care of our market management, we’ll proceed to pay shut consideration to our level of sale technique and make immediate revisions when mandatory throughout unpredictable financial occasions,” the corporate stated in its earnings assertion.
Chow Tai Fook’s income decreased by 17 per cent to HK$64.277 billion in FY2015 in comparison with HK$77.407 billion within the previous yr. General similar retailer gross sales declined 24.1 per cent, amongst which jewelry enterprise in Mainland China and Hong Kong and Macau recorded a decline of 16.1 per cent and 32.eight per cent respectively.
The corporate stated a part of the decline was resulting from gold gross sales coming down from a excessive base through the 2014 yr when commodity costs have been unusually excessive.
Income from gem-set jewelry as a proportion of income elevated by 5.9 per cent to 27 per cent.
Gross revenue decreased by 9.eight per cent to HK$19.072 billion, however gross revenue margin improved from 27.three per cent to 29.7 per cent. As on the finish of March it operated 30 eCommerce platforms, (11 greater than a yr earlier) together with its direct web site Chow Tai Fook eShop and all main third-party market platforms in Mainland China, specifically Tmall.com, JD.com, VIP.com, Suning.com, mei.com, and Amazon.cn.
“With a mean promoting worth of round HK$1000, our eCommerce platforms supply a youthful line of merchandise with decrease entry costs, concentrating on the youthful clients who type a big portion of internet buyers. In response to the wants of the youthful era, a few of our merchandise are provided solely on our e-commerce channels, and we’re placing extra emphasis on the quickly rising cellular platforms within the coming yr.”
“Chow Tai Fook’s income decreased by 17 per cent to HK$64.277 billion in FY2015 in comparison with HK$77.407 billion within the previous yr.”
The corporate additionally accomplished the acquisition of Hearts On Hearth, the worldwide model it took over in August to spice up its product vary and supply. Chow Tai Fook has already opened its first Hearts On Hearth retailer in Mainland China, in Shanghai
Chow Tai Fook says within the yr forward it’s going to stay dedicated to a balanced strategy of progress and return,
It plans so as to add an extra 150-160 factors of sale to its mainland China community.
“We consider room for enlargement continues to be vital for us, as we’re presently current in simply 484 cities out of over 700 within the nation. To make sure our new additions will absolutely seize market potential, we’ll concentrate on decrease tier cities and depend on native experience and professional information to facilitate market entry. As well as, we shall be conducting upgrades in roughly 10 per cent of our present POS to “high-end luxurious” or “magnificence” fashion over the subsequent three years in response to the evolving retail panorama. A lot of the upgrades will occur in Tier I and II cities, the place buyer expectations are typically greater.”
In Hong Kong and Macau, the emphasis shall be on effectivity, because it continues to consolidate its retail community the place applicable to handle rental prices.
“Abroad market stays a strategic element in our market improvement plans — our imaginative and prescient stays that we be the trusted model wherever Chinese language shoppers populate or ceaselessly go to; we now have set foot in Taiwan, Malaysia and Singapore — in addition to our latest regional market: South Korea.”
Chow Tai Fook additionally sees vital additional progress alternative in eCommerce. “Whereas we consider the core of our enterprise has by no means been modified, this initiative intends to discover methods to extract O2O synergy and to assist us keep related with our clients, particularly the youthful generations, in interactive and revolutionary methods.”
Questions & Answers
Q.Why did Chow Tai Fook's revenue and sales decline in the 2015 financial year?
Why did Chow Tai Fook's revenue and sales decline in the 2015 financial year?
The company's revenue decreased by 17 per cent, and overall similar store sales declined by 24.1 per cent. Part of this decline was attributed to gold sales coming down from a high base in the previous year, when commodity prices were unusually high.
Q.What is Chow Tai Fook's strategy for expanding its physical presence in mainland China?
What is Chow Tai Fook's strategy for expanding its physical presence in mainland China?
Chow Tai Fook plans to add another 150-160 points of sale in mainland China. The focus will be on lower-tier cities, using local expertise for market entry, as the company is currently present in 484 out of over 700 cities.
Q.How is Chow Tai Fook adapting its retail strategy in Hong Kong and Macau?
How is Chow Tai Fook adapting its retail strategy in Hong Kong and Macau?
In Hong Kong and Macau, the company will focus on efficiency and continue to consolidate its retail network. This approach aims to manage rental costs in these regions.
Q.What initiatives is Chow Tai Fook taking to attract younger customers and enhance its product offerings?
What initiatives is Chow Tai Fook taking to attract younger customers and enhance its product offerings?
The company is expanding its eCommerce platforms with lower-priced, younger product lines, some exclusive to online channels. It also acquired Hearts On Fire to boost its product range, opening its first store in mainland China.
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