Luk Fook local sales drop 18.7pct y-on-y in Q1 to HK$1.5 bln

Jewellery group Luk Fook Holdings (International) Limited has reported that revenue generated from its 11 self-operated shops in the Macau market dropped by 18.7 per cent to some HK$1.5 billion (US$202 million) in the first quarter of this year, but noted improvements this month.

Overall same-store sales growth – which represented a comparison of sales of the same self-operated shop having full-day operations in the comparable periods – in Hong Kong and Macau have dropped 33.3 per cent year-on-year in the first quarter of this year as visitor numbers to the two SARs plunged due to the Covid-19 pandemic.

Between January and March, the number of visitors reported in Macau went down by 69 per cent to some 3.2 million.

The company’s revenue for the first three months of the year also went down 29.2 per cent to about HK$11.2 billion, with profit attributable to equity holders decreasing by 42 per cent to approximately HK$866 million.

Meanwhile, same-store sales growth for Mainland China went down 20.2 per cent, and 33.2 per cent for gold and platinum products and 29.2 per cent for gem-set jewellery products was 29.2.

The regional jewellery giant noted that a strong gold price and the impact of poor macroeconomic conditions on consumer sentiment led to sales of gold and platinum products substantially decreasing by 35.7 per cent to HK$5 billion.

As of March 2020 As the group had a global network of 2,120 shops, including 2,062 ‘Lukfook’ shops with business spanning across Hong Kong, Macau, Mainland, Singapore, Malaysia, Cambodia, the Philippines, the United States, Canada and Australia.

The group noted that with border restrictions still not been fully lifted in Hong Kong, Macau and Mainland, same-store sales in the Hong Kong and Macau market recorded an 80 per cent drop for the period from April to May.

However, same-store sales for self-operated and licensed shops in the Mainland market recorded a much smaller decline with the business resumption of shops and gradual improvement of consumer sentiment.

In fact, the group added that starting from June, the retail sentiment in the Hong Kong and Macau market ‘gradually recovered’.

The decline of its same store sales in the first three weeks narrowed to around 60 per cent, while overall shops in Mainland market showed progressive improvements with a less than 20 per cent decline in June as compared to the 20 per cent drop in April to May 2020 and 40 per cent drop in March 2020.

‘As it is expected to take some time for the Mainland tourists to come back to Hong Kong and for retail atmosphere to resume normal, the Group will net reduce five shops in Hong Kong in the coming year, and seek opportunities for opening two new shops in Macau.

Luk Fook also remained optimistic over mid- to long-term business prospects and noted it would focus its expansion in the Mainland China market.