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Tag: 3D-Gold

  • Luk Fook Holdings gets back up to grow

    Luk Fook Holdings gets back up to grow

    In a golden first half, jewellery group Luk Fook Holdings (International) saw revenues and profits rise as it continued to expand its retail outlets.

    As well as a return to growth for same-store sales and a doubling of e-commerce sales, its interim results show a 14.9 per cent rise in revenue to HK$6.2 billion (US$794 million) for the six months to the end of September.

    A relatively stable gold price resulted in the group’s overall gross margin dropping to 26.2 per cent from 28 per cent a year earlier, but gross profit rose by 7.5 per cent to $1.6 billion. Profit attributable to equity holders grew by 21.3 per cent to $520.3 million.

    During the six months, the group added 46 Lukfook shops worldwide – 47 (29 licensed) in Mainland China and one in San Francisco, with two closures in Hong Kong. This took its global network to 1542 Lukfook shops (up from 1455 shops a year earlier), spanning Australia, Canada, China, Hong Kong, Korea, Macau, Malaysia, Singapore and the US. It also had 10 3D-Gold shops in China (an addition of one).

    Retail was the group’s primary source of revenue, which grew by 17.1 per cent to $4.7 billion, accounting for 75.1 per cent (up from 73.7 per cent) of total revenue.

    Slide reversed

    Back on track after three years of decline, first-half overall same-store sales growth was 11.2 per cent (minus 31.5 per cent a year earlier). There was double-digit growth in both Hong and Macau and Mainland China at 10.5 per cent (-32.3 per cent last year) and 16.7 per cent (-23.7 per cent) respectively.

    Hong Kong was the key market for the Group with the recovery of both retail sentiment and visitor arrivals. In terms of tourist spending, sales of jewellery, watches, clocks and gifts rose about 4.3 per cent, according to the Census and Statistics Department of Hong Kong. This was reflected in an 8.4 per cent lift in the group’s retail revenue in Hong Kong to $2.8 billion.

    Similarly, official figures in Macau show a 17.5 increase in tourist spending while the group’s revenue grew by 18.8 per cent to $790 million for the half-year.

    Meanwhile, retail revenue from the Mainland China market grew by 43.6 per cent to $924 million, attributed to an improved retail environment and more self-run shops. It accounted for 14.7 per cent of the group’s total revenue, up from 11.8 per cent a year earlier.

    Revenue from e-commerce in China jumped by 104.7 per cent to $136.6 million, accounting for 14.8 per cent of retail revenue, up from 10.4 per cent.

    Overall, first-half revenue from China grew by 25.5 per cent to $2.1 billion, accounting for 34.4 per cent of total revenue (31.5 per cent a year earlier).

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  • Luk Fook profits slump 42% on weak Hong Kong, Macau sales

    Luk Fook profits slump 42% on weak Hong Kong, Macau sales

    Jeweller Luk Fook Holdings is looking to Mainland China to restore growth after a heavy drop in profits due to the Hong Kong and Macau market slump.

    Lukfook Group says its sales declined 7.7 per cent to HK$6.965 billion in the half year to September 30 and profit attributable to shareholders slumped 42.4 per cent to $463 million.

    Same store sales across the business fell 11.6 per cent, largely due to falling sales of gem‐set jewellery products in Hong Kong and Macau. Sales fell 16.2 per cent in Macau alone.

    However in Mainland China, gem-set jewellery sales rose 17.5 per cent, marking the 10th consecutive quarter of positive growth in that market.

    Wong Wai Sheung, chairman and CEO of Lukfook Group said the slowing economic growth in Mainland China, relaxed visa requirements and currency devaluation in Europe, Japan and Korea as well as a strong Hong Kong dollar against other currencies had caused Mainland tourists to switch to overseas for consumption.

    “These adversely affected the retail industry in Hong Kong and Macau and hindered the recovery of the retail business of the group.”

    Hong Kong rents also took their toll on Luk Fook profits.

    “The decrease in revenue, together with the increase in total rental expenses mainly contributed by the high rental of the loss‐making new shops in certain Hong Kong prime locations, resulted in the increase in the total operating expenses to revenue ratio to 14.6 per cent (2014:13.0%),” the company said in its filing.

    The company opened a net total of 29 Lukfook shops (including 23 licensed shops and six self‐operated shops), and four 3D‐Gold self‐operated shops established by the new joint venture (the group has 51 per cent equity) with a licensee in Mainland China. The number of shops in Hong Kong and Macau and overseas remained unchanged. As at September 30, the group had 1412 Lukfook shops globally in Mainland China, Hong Kong, Macau, Singapore, Korea, the US, Canada and Australia; and four 3D‐Gold shops operated in Mainland China.

    Mainland Chinese visitors remained the primary customer group for the Hong Kong retail business, which contributes 60 per cent of the group’s turnover.

    Wong Wai Sheung said with continuing uncertainty in the global economy, the overall operating environment will remain challenging in the short term.

    “However, in the long run, as the per capita income in Mainland China increases, the group believes that there will still be strong customer demand for jewellery products, therefore the group remains positive about the mid‐ to long‐term business prospects. The group will continue to optimise the retail network, maintain the expansion strategy of focusing on the development in the Mainland China market, and further strengthen the cooperation with eCommerce platforms to expand our distribution channels, and also offer more fashionable and affordable jewellery products which are suitable for wearing in workplace, in order to attract middle‐class consumers.”

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