Chow Tai Fook to Shut Stores in Hong Kong
January 14, 2020
RAPAPORT... Chow Tai Fook intends to close up to 15 stores in Hong Kong as street protests and a tourism slowdown have hit sales.
Leases on more than 40 of the jeweler’s 91 retail locations in the municipality are due to expire during the fiscal year starting April 2020, the company said Tuesday. Management will decide which of those leases it will allow to lapse.
“We will review the store performance, and plan to shut down up to 15 stores by end of [the] 2021 [financial year], mainly located in tourist districts such as Causeway Bay, Mong Kok and Tsim Sha Tsui,” the Hong Kong-based retailer noted in a statement to Rapaport News.
Chow Tai Fook’s retail sales fell 38% in Hong Kong and Macau in the third fiscal quarter ending December 31 as unrest affected consumer demand. Pro-democracy demonstrations since mid-2019 have reduced local luxury sales and discouraged tourism, while visitors from mainland China have had less spending power as the trade war with the US has devalued the yuan. Gold-jewelry sales have also slumped because of rising prices of the metal.
Amid those challenges, the company has focused its growth on the domestic Chinese market, where third-quarter sales jumped 17%. It opened a net 279 retail locations in the country during the period, compared with two in Hong Kong.
Image: A protest in the vicinity of a Chow Tai Fook store in Hong Kong in July 2019. (Shutterstock)
Article originally published on Diamonds.net here