Luk Fook sales drop 10 per cent in latest quarter
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Luk Fook sales in the third quarter fell 10 per cent on a same-store basis. “Recent market sentiment has been adversely impacted by the US-China trade war, the depreciation of Renminbi, and downward pressure in the stock and property markets,” said chairman Wai Sheung Wong ina stock exchange filing. Luk Fook says same-store sales of gold products fell by 9 per cent and of gem-set jewellery by 8 per cent.
The company’s disappointing figures come in the same week as rival jeweller Chow Tai Fook reported an 11 per cent decline in sales across Mainland China, Hong Kong and Macau.
Wong said the Renminbi’s depreciation led to higher tendency for customers to purchase lower-value items, resulting in a double-digit drop in the average selling price of gem-set jewellery products.
Same-store Luk Fook sales in Mainland China fell by 14 per cent, with gold products down 16 per cent and gem-set jewellery down 5 per cent.
As at December 31 the company operated 221 of its own Lukfook stores, including 150 on the mainland, 49 in Hong Kong, 11 in Macau and 11 overseas. It supplied 1573 licensed shops on the mainland, one in Cambodia and one in the Philippines, making a total of 1796 worldwide.
Questions & Answers
Q.What are the main reasons given for the negative market sentiment impacting Luk Fook's sales?
What are the main reasons given for the negative market sentiment impacting Luk Fook's sales?
The chairman, Wai Sheung Wong, attributed the adverse market sentiment to the US-China trade war, the depreciation of the Renminbi, and downward pressure in the stock and property markets.
Q.How did the sales of specific product categories perform for Luk Fook?
How did the sales of specific product categories perform for Luk Fook?
Same-store sales of gold products fell by 9 per cent overall, while gem-set jewellery sales dropped by 8 per cent. In Mainland China, gold products were down 16 per cent and gem-set jewellery 5 per cent.
Q.What impact did the Renminbi's depreciation have on customer purchasing habits?
What impact did the Renminbi's depreciation have on customer purchasing habits?
The depreciation of the Renminbi led customers to purchase lower-value items. This resulted in a double-digit drop in the average selling price for gem-set jewellery products, according to the chairman.
Q.How many Luk Fook stores does the company operate, and where are they primarily located?
How many Luk Fook stores does the company operate, and where are they primarily located?
As of December 31, Luk Fook operated 221 of its own stores globally. The majority are in Mainland China with 150, followed by 49 in Hong Kong, 11 in Macau, and 11 overseas.
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