Luk Fook Sales Fall Amid China Lockdowns

RAPAPORT... Hong Kong jeweler Luk Fook's sales slipped 1% in the first fiscal quarter as the health situation deteriorated in mainland China.Total same-store sales - at Luk Fook outlets open for more than a year - in China dropped 28% year on year for the three months ending June 30, the company said last week. Same-store sales of gold priced by weight fell 30%, while purchases of fixed-price jewelry plunged 34%.Beginning in mid-March, a fresh wave of Covid-19 on the mainland led to new lockdown measures. The most severe outbreaks occurred primarily in areas where the majority of the jeweler's stores were located, it explained.Meanwhile, a solid performance in Hong Kong somewhat mitigated the downturn in China. Overall same-store sales in Hong Kong and Macau grew 2% for the April-to-June period. Revenue from gold products climbed 10%, with fixed-price jewelry down 21%. Macau recorded a 43% decline in April and May as the city suffered the effects of the challenges in China. However, the improved pandemic situation in Hong Kong, as well as a new round of government-issued consumption vouchers, drove a 40% rise in same-store revenue in the municipality. Strong demand for gold products, caused by the decline in the price of the metal, also buoyed sales.Luk Fook opened a net 36 shops on the mainland during the quarter, bringing the global total to 2,845. Image: A Luk Fook store in Hong Kong. (Hpalsgm)