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Luk Fook Sales Jump Amid Drop in Gold Price

Oct 19, 2022 7:43 AM   By Joshua Freedman
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Hong Kong-based jeweler Luk Fook enjoyed a sales boost in the second fiscal quarter as a decline in gold prices spurred consumer demand.

Same-store sales — at self-operated shops open for at least a year — jumped 40% for the three months ending September 30 compared with the same period of 2021, the company reported Tuesday.

The yellow metal’s value has tanked in dollar terms since March amid the appreciation of the US currency. Luk Fook’s same-store sales of gold — priced by weight at international market rates — grew 62% year on year during the quarter.

This outweighed an 8% fall in “fixed-price jewelry” — referring to products sold at prices determined by the retailer. Included in this category are diamond products, for which sales slumped 24% in mainland China.

Hong Kong and Macau were the main drivers, with overall same-store sales in those markets gaining 50%. Same-store sales at self-operated locations on the mainland slipped 4%, reflecting the country’s coronavirus containment measures and an unfavorable comparison with last year’s rebound.

Improvements in Hong Kong and Macau’s Covid-19 situation supported business during the period and beyond, Luk Fook explained.

“Attributable to the surging demand in gold products caused by the decline in gold prices and the increase in visitor arrivals due to the resumption of quarantine-free travel between Macau and [the] mainland, the [same-store sales] of the Hong Kong and Macau market still maintained considerable growth in the first two weeks of October 2022,” management commented.

Image: A Luk Fook store in the Kowloon district of Hong Kong. (Shutterstock)
Tags: China, COVID-19, diamond, gold, Hong Kong, Joshua Freedman, Luk Fook, macau, mainland china
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