RAPAPORT... LJ International Inc., a Hong Kong-based colored gemstone and diamond jeweler, reported a net loss $2.87 million in the first quarter that ended March 31,2012, compared to a profit of $3.3 million one year ago as expenses weighed on its performance.
Operating revenue increased 27 percent to $52.2 million and comparable store sales grew 17 percent year on year. Wholesale revenue fell 1 percent to $15.5 million.
"We continue to share the view that the long term outlook of China's luxury market is promising, yet the growth has evidently slowed down, a trend which is expected to appear more pronounced in slow seasons such as the second quarter of the year, and is compounded by comparisons as a result of the exceptionally strong growth last year," said LJ International chief executive officer Yu-Chuan Yih.
Selling, general and administrative expenses increased 65 percent to $24.2 million mainly due to an increase in investments in new store openings, marketing and branding campaigns, and professional fees for upgrades in internal control over financial reporting the company said.
The company added 6 new ENZO stores expanding its retail network to 208 stores at the end of March 2012. LJ's store count further grew to 218 at the end of May 2012.
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