Hong Kong: Hong-Kong based Chow Tai Fook, reports strong retail sales growth in the fiscal fourth quarter, reversing 12 consecutive quarters (3 years) of same store sales decline in Hong Kong and Macau, dating back to Q4 2014. The uptick was strongest in Mainland China, where overall retail sales value increased 16% while same store sales rose 12%. Overall and same store sales in Hong Kong and Macau rose by 1% and 4% respectively.
The company attributes the sequential improvement to, “stabilising fundamentals and a relatively low base of comparison.” Gold products, good for nearly 60% of the jewelers retails sales, saw the greatest increases, gaining 17% on Mainland China and 19% in Hong Kong & Macau. CTF says sales benefitted mainly from an increase in average selling price rather than volume. “While average international gold price rose 3% compared to the same period last year, the increase in average selling price was largely attributable to the gain in the average weight per gold product sold.”
Sales of gem-set jewelry, representing a quarter of the jeweler’s overall sales, grew 5% on Mainland China but fell by 17% in Hong Kong and Macau. The increase in Mainland China was driven by an increase in both volume and average selling price during the quarter, while performance in Hong Kong and Macau was dragged down by a decline in average selling price while volume recorded a positive growth.
Notably, Chow Tai Fook reports that as a result of, “strengthened co-operation with existing online platform partners”, e-commerce in Mainland China, recorded a “robust” 85% increase in the value of retail sales growth in Q4. Their E-commerce contributed 2.9% and 8.7% of retail sales value and retail sales volume, respectively in Mainland China during the quarter. They now have 2,129 points of sale for jewelry in Mainland China, 102 in Hong Kong and Macau and sell Hearts on Fire at 13 locations in the United States and Taiwan.
The Hong Kong-based jewelry retailer made global news headlines just after the quarter closed when they bought the 59.6 carat Pink Star diamond for appoximately $71 million, setting the world record for the top auction price for any gem.