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RAPAPORT... Chow Sang Sang Holdings International reported that its revenue from the jewelry division surged 18 percent year on year to $1.9 billion (HKD 14.86 billion) in 2012. Revenue from the group's other businesses, which included precious metal wholesale, fell 25 percent to $438 million (HKD 3.4 billion), but combined company turnover rose 6 percent to $2.4 billion (HKD 18.3 billion). Same-store growth was 9 percent. Profit attributed to equity holders fell 10 percent to $127 million (HKD 985 million) due to no increase in demand for higher-priced, higher-margin products, coupled with steeper in store discounts, which negatively impacted gross margin. By geographic region, the company's sales were bascially flat in Hong Kong and in Macau at $1.6 billion (HKD 12.5 billion) but revenue from Mainland China rose 24 percent to $720 million (HKD 5.6 billion). In a note to its shareholders, Chow Sang Sang concluded that 2012 experienced modest growth in the sale of gold and jewelry, but turnover in the third quarter was flat. Gold prices have slipped since reaching a high in August 2011, although this did not negatively impact gold jewelry sales. Nonetheless, weaker gold prices caused a considerable depression on gross margin, according to the company. The net gain on gold, due to price movement in 2012, was $5 million (HKD 40 million), compared with $23 million in 2011. Chow Sang Sang reported no growth in the sale of higher-priced items and in an effort to lure customers into shop, department stores and the competition resorted to discounting, adding further downward pressure to the company's own gross margin, according to the company.
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