Hong Kong-based Chow Sang Sang reported that group revenue, including its retail and wholesale divisions, rose 10 percent year on year to $1.17 billion (HKD 9.10 billion) in the six months that ended on June 30, 2012. Sales were driven by demand from Mainland China. Profits, however, decreased 11 percent to $56.6 million (HKD 439.4 million), Rapaport reports.
Chow Sang Sang’s jewelry retail sales rose 27 percent year on year to $937.3 million (HKD 7.27 billion) during the first half of 2012. Sales in Hong Kong and Macau, largely driven by tourism, accounted for 59 percent of jewelry sales and Mainland China accounted for 40 percent. The company added 21 new shops during the period, thus, it operated 249 stores the end of the first half.
The wholesale division reported a sales decline of 29 percent year on year to $224.5 million (HKD 1.74 billion), Chow Sang Sang reported.
Chow Sang Sang explained that retail conditions proved to be difficult compared with one year ago when the company's performance was much stronger. According to government statistics, consumer spending in the first five months of 2012 increased 13 percent year-on-year compared with 48.7 percent in the prior year.
Buffeted by ''dire economic news from the euro zone'' and the slackening growth on the Mainland, local and visiting consumers tended to be more cautious in their spending on jewelry and watches, the company noted.
The company stated that a drop in gold prices from late February stimulated the demand for gold, but it cut into the margin of gold sales. As a result, it realized a net loss of $2.7 million (HKD 21 million) in the first half of 2012 as compared with a net gain of $10.3 million (HKD 80 million) in the first half of 2011.
Chow Sang Sang noted that although the central government in Beijing has been easing its control on credit, any effect from this stimulus remains to be seen. The group concluded that it maintains a positive but cautious outlook and will tune its inventory levels and schedule of store opening accordingly.
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