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Luk Fook Sees Further Growth in China

Hong Kong jeweler accelerating its store expansion after strong first half results.
Nov 30, 2017 6:51 AM   By Rapaport News
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 Hong Kong-based jeweler Luk Fook is planning to accelerate its expansion in mainland China after seeing steady growth in the fiscal half-year that ended September 30.

The company attributed its improvement to a successful new product strategy as well as the more positive sentiment among consumers in China and tourists traveling to Hong Kong.

Group revenue increased 15% to $804.7 million (HKD 6.28 billion), with sales of gem-set jewelry up 15%, and gold and platinum jewelry rising 14%. Retail sales in Hong Kong and Macau grew 13% to $499 million (HKD 3.9 billion).

“Given the recent recovery of retail sentiment and visitor arrivals [in Hong Kong], consumption expenditure per capita rose amid favorable macroeconomic conditions together with improved spending power,” the company explained in its interim report published Wednesday.

Luk Fook’s retail sales in China surged 41% to $118.4 million (HKD 924.7 million), driven by improved consumer sentiment and an increase in the number of shops it operates in the country. Same-store sales in China grew 17%, while the company added 18 self-operated shops during the six-month period.

Of the 1,476 stores it had in China as of September 30, 151 were self-operated and 1,325 were licensed stores. The company’s global network consisted of 1,455 stores, including four in the US.

Luk Fook said it planned to continue its expansion in China, particularly in the second-tier and lower cities. The jeweler revised its expansion plan for the current fiscal year because of the improved retail operating environment. It now plans to open 100 stores in China, rather than 50 originally planned.

Group profit rose 20% to $66.8 million (HKD 521.4 million) for the six-month period.

Image: Hpalsgm  
Tags: China, diamonds, gem-set, gold, Hong Kong, jewellery, Jewelry, Luk Fook, Rapaport News, watches
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