Luk Fook 3Q Same-Store Sales -7%

Jan 18, 2015 5:54 AM By Ronen Shnidman

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RAPAPORT... Luk Fook Holdings, a Hong Kong-based jeweler, reported that its same-store sales fell 7 percent year on year in the third quarter that ended on December 31, 2014. The decline resulted from weak consumer sentiment and the impact of the Occupy Central movement on retail sales, the company explained; however, it did not provide hard sales totals.

The group's gem-set jewelry same-store sales fell 8 percent, while gold same-store sales dropped 6 percent during the period. By weight, gold same-store sales were flat.

Same-store sales in Hong Kong and Macau fell 6 percent. Gem-set jewelry same-store sales in Hong Kong and Macau dropped 9 percent and gold same-store sales fell 5 percent by value, but rose 1 percent by weight, aided by a mini-gold rush in November triggered by lower gold prices.

In Mainland China, same-store sales declined 11 percent during the third quarter. Gem-set jewelry same-store sales rose 13 percent partially offsetting a 16 percent drop in gold sales. By weight, gold same-store sales fell 10 percent in Mainland China. Luk Fook attributed declining gold sales in China to a high base effect caused by strong sales growth during last year’s gold rush.

Luk Fook’s same-store sales measure only includes self-operated stores. However, the vast majority of its store locations in Mainland China are licensed franchises.

As of December 31, Luk Fook had 79 self-operated stores in Mainland China, after closing three shops during the third quarter. In Hong Kong and Macau, the company had 57 self-operated shops after opening one new store during the quarter. The company had another five self-operated stores in other locations around the globe, unchanged from the previous quarter.

Luk Fook continued expanding store franchise network in Mainland China during the quarter, with the number of such stores rising 4 percent, or by 43 stores, to 1,233 locations by the end of the period.

Tags: China, gem-set jewelry, gold rush, high-base, Hong Kong, Luk Fook, macau, Ronen Shnidman