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Hong Kong jewellery retailer Luk Fook reported a decline in first-quarter revenue as concerns around the price of gold and waning consumer spending continue. | Source: Wikipedia
Hong Kong jewellery retailer Luk Fook reported a decline in first-quarter revenue as concerns around the price of gold and waning consumer spending continue. | Source: Wikipedia

Jewellery sales dented by rising price of gold

Hong Kong jewellery retailer Luk Fook reported a decline in first-quarter revenue as concerns around the price of gold and waning consumer spending continue.

Sales decreased by 18 per cent on a year-on-year comparison for the period ending 30 June. The decline in revenue was attributed to an increase in the international gold price and a lack of demand for diamond jewellery.

Same-store sales declined by 34 per cent, with the sale of gold products decreasing by 33 per cent, while fixed-price jewellery dropped by 36 per cent.

The retailer closed 99 stores during the quarter, bringing its global total to 3,484.

"Although the temporary spike in gold prices may affect sales performance, sales of the gold products are expected to resume to the normal levels after consumers adapt to the high gold prices."

A company statement said that the rise in gold prices in April impacted the sale of jewellery across the quarter.

“Although the temporary spike in gold prices may affect sales performance, sales of the gold products are expected to resume to the normal levels after consumers adapt to the high gold prices,” the statement reads.

“Moreover, since the demand for diamond products remains subdued, the group will continue to actively promote non-diamond fixed-price jewellery products. The group remains optimistic about its mid-to-long-term business prospects and will continue to expand in the mainland market.” 

Luk Fook recently announced a 28 per cent increase in sales for the past financial year, which was attributed to the return of tourism to the region.

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