Hong Kong-based jewellery retail chain Chow Tai Fook Jewellery Group Limited (CTF) reported a significant drop in sales due to high gold prices and a resulting drop in consumer demand.
In its first financial quarter ended June 30, the company reported a 20% year-on-year average decline in retail sales across the group. “During the first quarter, both mainland China and Hong Kong and Macau recorded negative [sales growth] as macro challenges continued to impact consumers’ spending,” the company commented. “Coupled with gold-price volatility at high levels, we witnessed hiccups in gold-jewelry demand in the quarter.”
Demand for diamond jewellery was also affected. During the quarter, sales of gemstone jewellery declined by 32% in China and by 31% in Hong Kong and Macau. “Consumption of gem-set jewellery is more discretionary in nature and hence, more muted under current market conditions,” the company explained.
Over the past three months, Chow Tai Fook closed 91 stores in mainland China. The group’s total stands at 7,754 points of sale.
The group currently undergoes a brand transformation to enhance its appeal and strengthen its leading position. As noted, with the launch of the signature CTF Rouge collection in April, the changes were generally perceived positively. “This is one of our key fixed price collections,” the company added.
Hélène Tarin, Editor-in-Chief of the Asian Bureau, Rough&Polished
