Retailers Chow Sang Sang and Seng Fung both reckon the fall trend in jewellery sales seen in 2015 will last until the upcoming holiday
The fall trend seen in jewellery sales last year will persist all the way through the upcoming Chinese New Year holiday in February, and more shop consolidations or a halt of retail expansion are likely to happen under the bearish outlook on sales, said jewellery retailers. Mr Lau Hak Bun, general manager of retail operations (Greater China) at the jewellery retailer Chow Sang Sang Holdings International Ltd, told media yesterday after attending a Hong Kong radio programme of his bearish forecast for sales for the coming Chinese New Year holiday, with a likely register of “single-digit” drop in sales for Hong Kong and Macau.
The Chinese New Year holiday this year will fall on the second week of February.
Speaking to media, Mr Lau has noted that sales during Christmas have failed to stimulate overall sales for Chow Sang Sang, which has already seen a fall trend since the first half of 2015. Chow Sang Sang saw its same store sales in Hong Kong and Macau decline by 12 percent year-on-year for the first half of last year as the consumption sentiment from mainland Chinese clients weakened and the unit selling price of the company’s jewellery items decreased, Mr Lau said.
The gaining strength of the US dollar and the depreciation of Southeast Asian currencies will also affect visitors’ high-end spendings in Hong Kong this year, the jewellery retailer executive expected. Lee Koi Ian, general manager at local jewellery retailer Seng Fung Jewellery Co Ltd, shared a similar sales outlook with Mr Lau.
“The recent drop in gold prices has not really stimulated much of our sales,” Mr Lee told Business Daily, “Since last year, the sales of jewellery has weakened a lot as we have seen much less gift hunting [from mainland Chinese shoppers] and spending from gamblers.”
Declining to give a full sales figure for last year, Mr Lee said Seng Fung has suffered a “double-digit” drop in its turnover for the whole year.
“Visitors’ traffic did improve a bit during the Christmas holiday, but still on a year-on-year basis, we saw our sales register a single-digit drop,” Mr Lee said.
For the first three quarters of 2015, notable decline is seen in the sales of watches and jewellery here: the value of the retail sales of watches and jewellery has dropped by 26.1 percent year-on-year to MOP10.15 billion in the period, latest available data from Statistics and Census Service (DSEC) shows.
Cautious outlook
In response to the weaker sales performance, both Chow Sang Sang and Seng Fung said that they are not going to offer steep discounts for the promotion of sales of their products.
“But we’ll be more cautious in our shop expansion plan,” Mr Lee said, “In the coming one or two years, we don’t think we are having more shops in casinos.”
Currently Seng Fung runs eight shops across Macau, mostly on streets. In Chow Sang Sang’s interim report filed in September last year, the retailer has already mentioned that one street-level shop in Macau was closed at the expiry of its lease. Now Chow Sang Sang runs four shops in Macau, of which three are in casino-resorts.
The Hong Kong-listed jewellery retailer does not rule out more shop consolidation or even closures to happen, Mr Lau noted to media yesterday. Chow Sang Sang has already closed two stores last year, one in Causeway Bay and another in Kwai Fong.