Jeweller Chow Sang Sang has reported a 12 per cent slump in same store sales in Hong Kong and Macau during the first half of this year.
But the company’s total sales slipped just one per cent and its profit rose 40 per cent during the six months, due to its disposal of shares in Hong Kong Exchanges and Clearing Ltd. Operating profit was down about 12 per cent.
The company said while official records show a 5.9 per cent increase in the number of visits to Hong Kong by Mainland Chinese in the first five months, “actual spending by these visitors did not bring much cheer to the luxury retail sector”.
“Negative sentiments towards cross-border traders and even mainland visitors probably cast a pall over shopping activities. Exchange rate fluctuations caused price differences that made it worthwhile for consumers from the mainland, and even those from Hong Kong, to shop in Japan and Europe for luxury goods.”
During the half, Chow Sang Sang closed its Metroplaza store in Kwai Chung, but expanded its store in Elements, West Kowloon and converted the fitout to the company’s new generation shop design.
The company said Macau was especially hard hit by the anti-graft campaigns and the measure to restrict funds outflow. One street-level store was closed there at the expiry of its lease.
“On the Mainland, the slowing growth in the economy, the continued anti-corruption and austerity drive affected high-ticket spending, but in general the retail sector was healthy.”
The jeweller opened 21 stores during the half taking its reach to 102 cities. Ten underperforming stores were closed for a net gain of 11 and a total network of 333.
The company says in the months ahead it will continue to closely monitor its inventory levels. It has revamped its online shops both for the Mainland and Hong Kong and online sales continue to grow.
“We are making progress in facilitating our online customers to take advantage of the network of physical stores.”
In Hong Kong the company has acquired space in Citywalk, Tsuen Wan, to open a Rolex and Tudor store.
The existing store in the same mall shall cease to operate its watch counters.
In China 18 stores are planned between now and Christmas, along with several refitting and closings.
