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Luk Fook's FY Revenue -17%, Profit -13%
Jun 25, 2015 5:35 AM
By Ronen Shnidman
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RAPAPORT... Luk Fook reported that its revenue declined 17 percent year on year to $2.05 billion (HKD 15.92 billion) during the fiscal year that ended on March 31. Group profit fell 13 percent to $209 million (HKD 1.62 billion), as declining revenue was partially offset by a shift in the sales mix from gold products to higher-margin gem-set jewelry.
The Hong Kong-based jeweler attributed the decline to a high comparable-base that was caused by the gold sales rush during fiscal 2014, but also to general negative consumer sentiment in the greater China region. Management said that an economic slowdown in China, currency depreciation and relaxed visa requirement for Chinese tourists traveling to other luxury shopping destinations hurt consumer sentiment among Chinese visitors traveling to Hong Kong and Macau.
Luk Fook's revenue from Hong Kong, Macau and overseas slid 20 percent to $1.54 billion (HKD 11.92 billion). Approximately 71 percent of the group’s revenue came from its retail stores in Hong Kong, Macau and overseas markets during the year.
Revenue in Mainland China, where Luk Fook maintains a large network of mainly franchise locations, dropped 5 percent to $516 million (HKD 4 billion). However, wholesale revenue in Mainland China increased 12 percent to $238.8 million (HKD 2.2 billion) during the year.
Luk Fook opened 111 stores (net) in Mainland China during the year, three shops in Hong Kong and its first store in South Korea. As a result, the group now has a sales network of 1,383 stores across Mainland China, Hong Kong, Macau, Singapore, South Korea, the U.S., Canada and Australia. |
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Tags:
China, gold rush, Hong Kong, Luk Fook, retail, Ronen Shnidman, Slowdown
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