Hong Kong-listed jeweller Luk Fook sales slumped 19.8 per cent in the September half as protests, the trade war and the Renminbi’s value kept mainland tourists away, and the high gold price muted demand.
The company reported sales of HK$6.3 billion (US$804.86 million) and profit attributable to shareholders of $496 million, down by 25.4 per cent.
Same-store sales in Hong Kong fell by 24.9 per cent during the half year and in Macau by 15.7 per cent.
Luk Fook ended the half with a net addition of 129 stores, taking its global network to 1957 stores.
Chairman and CEO Wai Sheung Wong said that given the impact of protests on Hong Kong sales, the high gold prices and the impact of the Sino-US trade war on consumer confidence, the group does not expect trading conditions to improve during the second half. He projected a double-digit drop in annual revenue and profit.
“The group will reduce the number of shops in areas which are considerably impacted by the social incidents in Hong Kong, and search for opportunities for opening new shops in Macau market. [We] expect to have three net shop additions in Hong Kong and Macau,” he said. Luk Fook will also be looking abroad for opportunities, including on the mainland.
“In view of the anticipated considerable growth of the middle-class population in Mainland China, the group remains optimistic about the mid- to long-term business prospects, and looks forward to bringing its business to a new height in the near future.”