King Fook warns of ‘severe’ challenge ahead

Listed jeweller King Fook has warned Hong Kong’s sluggish retail market will continue with a “severe” challenge to the luxury goods retail market.
In response it plans to “cautiously review” and adjust its store locations to reduce rent costs and implement other cost cutting strategies by streamlining operations and finding ways to improve internal efficiencies.
The company, founded in 1949, operates stores under the King Fook, Masterpiece by King Fook and Audemars Piguet brands in Hong Kong and Mainland China.
The comments follow the release of its six month figures to September 30. The company’s revenue fell 21.6 per cent year on year to HK$322,835,000 but the loss attributable to shareholders reduced 37. 3 per cent from $95 million to $59.6 million.
King Fook blamed the sales slide on the closure or downsizing of several stores and weaker consumer spending on luxury goods, largely due to reduced tourist numbers and subdued local consumer sentiment.  
Besides planned management and store network rationalisation, the company plans to optimise its product mix and launch online.
“The group believes that the online platform will attract internet users to visit its retail shops in person, enlarge the customer base and create business growth effectively with lower cost so that the group’s profitability will be enhanced,” it said in its stock exchange filing.

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