Hong Kong-based jewelry company Luk Fook has announced plans to expand overseas amid recovering demand and, consequently, increased sales in its second financial quarter.
The company reported that overall sales increased 18% year-on-year in the quarter ended September 30. Sales at stores open for at least a year increased 10%.
The retailer acknowledges that a significant portion of this growth was driven by a 40% increase in gold prices during this period. While high gold prices have dampened consumer sentiment in the past, Luk Fook believes that consumers are acclimating to higher prices and returning to purchase.
Demand for diamond jewelry remains weak, but has increased compared to the previous year. Sales in Hong Kong and Macau increased 13%, and in mainland China, 20%. In-store gold sales with prices by weight at international market rates increased 6% year-over-year for the quarter, fixed-price jewellery sales increased 27%, fixed-price gold sales increased 68%, and fixed-price diamond sales decreased 9%.
In-store gold sales in China increased 3%, while fixed-price jewellery sales increased 8%. Fixed-price gold sales in mainland China increased 49%, while fixed-price diamond sales decreased 31%.
In the second quarter, the company closed a total of 49 stores, bringing its total number of stores to 3,113. In the first half of the year, Luk Fook opened eight new stores overseas, entering the Vietnamese market for the first time. In light of the new US tariff policy and "increased tensions" between the US and China, the jewelry company plans to expand its overseas presence and open approximately 20 international stores by the end of the fiscal year, according to the statement.
After the end of the second quarter, for the two weeks from October 1 to 14, sales exceeded the second quarter's figures: in Hong Kong, Macau, and other overseas markets, sales grew by 19%, while in China, they grew by 16% for independent stores and by 51% for licensed stores, the company added.
Hélène Tarin, Editor-in-Chief of the Asian Bureau, Rough&Polished
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