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Chow Tai Fook's 1H Revenue -22%
Nov 25, 2014 6:56 AM
By Avi Krawitz
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RAPAPORT... Chow Tai Fook reported that revenue fell 22 percent year on year to $2.88 billion (HKD 29.32 billion) in the six months that ended on September 30, 2014 as gold sales failed to keep pace with last year’s levels. Profit slumped 23 percent to $352.8 million (HKD 2.74 billion).
The jewelry market downturn during the first half of fiscal 2015 came as no surprise to the company, given the relatively slow economies in both Hong Kong and Mainland China, the company explained in its interim report.
Chow Tai Fook added that it improved its product mix to capture growth potential in gem-set jewelry as it recognized gold sales would normalize from the exceptionally high base experienced last year.
Chow Tai Fook noted that sales of gem-set jewelry grew 25 percent to $1.07 billion (HKD 8.29 billion) during the period, while gold product sales slid 41 percent to $1.87 billion (HKD 14.53 billion). Sales of platinum and karat-gold products fell 5 percent to $609.4 million (HKD 4.73 billion), while watch sales increased 18 percent to $229.3 million (HKD 1.78 billion).
The company noted that there were signs of resilience toward the end of the half year in Mainland China, although sales in Hong Kong continue to be impacted by the Occupy Central political protests occurring in the city over the past two months. Last week, Chow Tai Fook reported that its Hong Kong sales fell 22 percent in October due to the protests.
The bulk of the company’s business is conducted in Mainland China, where its retail jewelry sales fell 16 percent to $2.52 billion (HKD 19.51 billion), while watch sales increased 55 percent to $152.9 million (HKD 1.19 billion). Sales in Hong Kong, Macau and other markets dropped 33 percent to $1.58 billion (HKD 12.22 billion).
Chow Tai Fook operated 2,062 points of sales in China and 129 in Hong Kong, Macau and other markets at the end of September, having opened a net 114 new locations during the period. The company expects to double its store count in the next 10 years.
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Tags:
Avi Krawitz, Chow Tai Fook, diamonds, Jewelry, Rapaport
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