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Pandemic Pinches Luk Fook Revenue

Jun 29, 2020 10:17 AM   By Rapaport News
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Luk Fook’s revenue and profit fell in fiscal 2020 as the coronavirus and social unrest in Hong Kong hampered sales.

Overall revenue for the Hong Kong-based jewelry retailer dropped 29% to HKD 11.23 billion ($1.45 billion) for the year ending March 31, it reported last week. Net profit plunged 42% to HKD 867.7 million ($112 million).

The company’s retail revenue in mainland China slid 28% to HKD 1.74 billion ($224.5 million), while same-store sales at branches open for at least a year fell 20%. The company was forced to close stores during part of the year as a result of Covid-19. Low consumer sentiment because of the US-China trade war also affected sales, it said.

In Hong Kong, the jeweler’s revenue declined 43% to HKD 4.27 billion ($551.2 million), with same-store sales slumping 33%. Ongoing protests against the government had a strong impact on sales, as did a virtual halt to tourism caused by the pandemic.

Group same-store sales fell 32%. In addition to Hong Kong and China, the company has operations in markets including Macau, Singapore, Malaysia, the Philippines, Cambodia, the US, Canada and Australia.

Same-store sales of gold and platinum products dropped 33%, the retailer reported, while those for gem-set jewelry items decreased 29%. Total sales of gold and platinum products plummeted 36% to HKD 5.01 billion ($646.7 million), constituting 48% of overall sales. Gem-set jewelry sales fell 25% to HKD 5.42 billion ($699.3 million), accounting for the remainder of the total.

Image: A Luk Fook store in Hong Kong. (Shutterstock)
Tags: jewelry retail, Luk Fook, Rapaport News
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