Revenue for jewellery group Luk Fook Holdings (International) in its latest fiscal year dropped 11.9 per cent to HK$14.03 billion (US$1.809 billion) from HK$15.92 billion the previous year.
With the adjustment of retail prices to cope with market price changes of diamonds, the gross margin of gem-set jewellery products, resulting in gross profit falling by 15.1 per cent to HK$3.25 billion.
Chairman and CEO Wong Wai Sheung says the group was hit by the continued slowdown in the economic growth in mainland China, the tightening of the Individual Visit Scheme Policy and the drop in mainland tourism numbers to Hong Kong and Macau. Furthermore, the retail market had been affected by the disappointing performance of the property and stock market in mainland China.
Continuing to be the primary revenue source for the group, the retail business saw a slide of 12.8 per cent in revenue to HK$10.94 billion, accounting for 78 per cent (78.8 per cent in 2015) of total revenue.
Revenue for the wholesale business decreased by 8.3 per cent to HK$2.56 billion, accounting for 18.2 per cent (17.6 per cent in 2015) of total revenue.   
Gold products were still the customer favourite, but together with platinum products their revenue fell by 10.9 per cent, compared with a 26.1 per plunge in 2015, to HK$8.23 billion, accounting for 60.9 per cent of overall sales.
Overall same-store sales fell 19.3 per cent for the year, mainly because of a 20.1 per cent drop in the Hong Kong and Macau market.
Mainland Chinese visitors continued to be the major driver for the retail business in Hong Kong, with the city still the key source of revenue for the group. The group’s retail revenue there fell by 13.4 per cent to HK$7.73 billion.
The performance of Macau market was even worse, revenue tumbling by 22.3 per cent to HK$1.76 billion.
Mainland China’s revenue, meanwhile, eased by 2.3 per cent to HK$3.9 billion.         
During the year, the group added 54 shops worldwide, including 46 Lukfook shops (20 of them licensed shops) in mainland China and 9 3D-Gold shops through a new joint venture with a licensee in China.
One Lukfook shop was closed in Hong Kong and another opened in Canada, while the licensed shop in Korea was closed temporarily, pending relocation.
As at March 31, the group had a global network of 1437 shops (1383 the previous year), including 1428 (1383) Lukfook shops, spanning China, Hong Kong, Macau, Singapore, the US, Canada and Australia.