Weak consumer sentiment has been reflected in Chow Tai Fook’s net profit for the six months to September – it posted a decline of 32.9 per cent to US$245 million.

The Hong Kong-based jeweller said overall same store sales declined 1.7 per cent as same store sales slowed in Hong Kong, Macau and Taiwan.

Gross margin was down 26.4 per cent, blamed on the rapid hike in gold price in September causing a non-cash gold hedging loss.

Revenue recorded an increase of 6.5 per cent to US$3.2 billion, fuelled by the expansion of the retail network in the mainland where it opened 101 new stores during the period, mostly in lower tier cities. The company says it will open 200 new stores a year until 2014.

Chow Tai Fook expects the current economic uncertainties to continue, however remains optimistic about the retail market and anticipates consumer confidence and market sentiment in mainland China and Hong Kong will recover.

“In the second half, typically the busiest retail season with Christmas, Chinese New Year and Valentine’s Day, we will strive to execute our strategic plans well to maximise profits and shareholder value,” said Kent Wong, Chow Tai Fook’s MD.

The jeweller now has more than 1700 stores in Greater China, Singapore and Malaysia.

GB