Jeweller Luk Fook has reversed a three-year trend of declining revenue in its latest financial year, boosting sales by 13.8 per cent to HK$14.578 billion (US$1.857 billion).

Releasing its results for the year to March 31, the company said the turnaround was the result of improved retail sentiment, especially in its largest market of Hong Kong-Macau. Profit attributable to shareholders grew 34.7 per cent to $1.4 billion.

Luk Fook finished the year with 1642 stores globally, 137 more than the previous year with almost all of the new stores on the mainland.

Wong Wai Sheung, group chairman and CEO,, said that despite the impact of the slowdown in economic growth in Mainland China and the changes to the Individual Visit Scheme, there was gradual improvement in spending per capita.

The retail business, the group’s primary source of revenue, improved 14.3 per cent to $10.995 billion. Within that, sales of gem-set jewellery increased 24.2 per cent. Sales of gold and platinum products increased by 10.2 per cent.

Luk Fook reported same-store growth in Hong Kong and Macau of 9.4 per cent last year, a huge contrast to the 19.5 per cent decline of the previous year. Mainland China same-store sales grew by a more modest 4.6 per cent, compared to a 4.8 per cent drop the prior year.

Besides adding 132 new stores in Mainland China, Luk Fook opened its first licensed store in Cambodia and one store in each of Hong Kong and San Francisco.

Rebound continues

Wong Wai Sheung said the improved overall economic environment and increased visitor arrivals in Hong Kong and Macau is reflected in ongoing positive retail sentiment since April this year.

Same-store sales growth continued to run in the double digits this year and sales of gem-set jewellery in the mainland market had returned to positive growth.

“However, under the influence of US-China trade war and geopolitics, there are still many uncertainties around.”

That aside, he said the continuing growth of the mainland’s middle-class population  fuelled optimism about Luk Fook’s mid- to long-term business prospects.