BRIEF: Chow Tai Fook’s revenue slumps, shutters 406 stores

Jewelry retailer Chow Tai Fook Jewellery Group Ltd. (1929.HK) reported on Thursday its sales fell 11.6% year-on-year in the three months through March. The company’s sales in Mainland China dropped 10.4% during the quarter, while Hong Kong, Macao and other markets declined by a sharper 20.7%.

The company noted that macroeconomic headwinds and high gold prices continued to dampen consumer sentiment. But it added that its product mix optimization and Lunar New Year marketing campaigns helped to narrow same-store sales declines on the Mainland, which dropped 13.2% and 8.7% for the company’s directly operated stores and franchised outlets, respectively.

In Hong Kong and Macao, outbound travel by locals and evolving preferences of visiting tourists from the Mainland continued to weigh on the company. Same-store sales declines were similar to the previous quarter, with Hong Kong and Macao recording drops of 13.2% and 8.7%, respectively. Chow Tai Fook operated 6,643 retail locations globally at the end of March, down by a net 406 stores from the previous quarter.

Quarterly results released by rival Luk Fook Holdings (0590.HK) last week also showed an 11% drop in retail revenue for the company in Hong Kong and Macao in the three months to March — though sales in Mainland China rose 20%.

Chow Tai Fook’s stock opened down on Friday and closed at HK$9.24 by the midday break, down 4.05%.