The price of gold has soared, and it is obvious to all. Especially since the beginning of this year, taking gold brands such as Chow Tai Fook and Chow Sang Sang as examples, the price of gold per gram at the beginning of the year was more than 600 yuan, and now it has broken through the 800 yuan mark, and the price of Chow Tai Fook, Luk Fook Jewellery, Chow Sang Sang and other brands has exceeded 800 yuan per gram. I thought that the price of gold would rise, and the gold shops would be able to make a lot of money, but this was not the case. In the past six months, well-known gold store brands such as Chow Tai Fook and Luk Fook have closed their stores one after another.
Lukfook's revenue fell 25% in the second quarter
Hong Kong jewelry brand Luk Fook Group announced its latest performance data on the evening of October 17, the group's overall retail value fell by 16% in the second quarter of fiscal 2025 (July 1-September 30) and the first two weeks of October, retail revenue fell by 25%, and same-store sales fell by 35%. Same-store sales of gold and diamond jewellery fell by 38% and 45% year-on-year respectively. Gold and platinum products accounted for 79% of the total retail value, while priced jewellery accounted for 21%. The group said that retail performance was mainly affected by the high base effect and the record high gold price, and gold sales are expected to return to normal after consumers adjust to the high gold price.
Luk Fook Group's financial report.
Retail revenue in Chinese mainland fell 9%, same-store sales fell 29%, retail revenue in Hong Kong and Macau fell 31%, same-store sales fell 38%.
Luk Fook Group's financial report.
As of 30 September, Lukfook Group had a total of 3,408 stores worldwide, including 2,931 Lukfook brand stores and 225 Gold Supreme stores. During the reporting period, the Group's main brand Lukfook closed 81 stores and other sub-brands closed 1 store, with a net decrease of 76 stores in the total number of stores during the period.
In addition, according to the Luk Fook Group's report for the first quarter of fiscal year 2025, as of June 30, the retail value of Luk Fook Jewellery fell by 18%, same-store sales fell by 34%, and same-store sales of gold and diamond jewellery fell by 7% and 52% respectively, with a net decrease of 108 Luk Fook Jewellery stores in the mainland market. A total of 184 stores were closed in half a year.
Chow Tai Fook closed 180 stores in the first half of the year
Founded in Guangzhou, Chow Tai Fook, who became famous in Hong Kong and Macau, has a history of nearly 100 years as a leader in gold stores. In July, Chow Tai Fook announced that same-store sales in Chinese mainland fell 26.4% in the first quarter of fiscal year 2025 ended June 30, and same-store sales in Hong Kong and Macau fell 30.8%. These two markets accounted for approximately 87.8% and 12.2% of Chow Tai Fook's total retail value respectively. In the first half of this year, Chow Tai Fook closed a total of 180 stores in mainland China. Chow Tai Fook managing director Wong Siu Kee said that Chow Tai Fook's decline in the November Golden Week this year narrowed year-on-year, in line with expectations, and he believes that the recent introduction of a series of favorable economic policies will increase market confidence, and the group's business is expected to gradually improve in the third to fourth fiscal quarters.
Chow Tai Fook's Queen's Road Central concept store in Central has opened recently, covering an area of approximately 2,880 square metres, showcasing a variety of traditional Chinese gold crafts. The group has previously said it will overhaul its retail business, planning to strategically renovate its stores over the next five years, with an average of 1,000 stores per year.
Huang Shaoji revealed that the group achieved its target of 7,000 stores two years ahead of schedule, and the size of stores is not the only growth consideration for the brand at this stage. In the process, it is inevitable to close the stores with poor or weak performance and put resources in more promising places.
Zhou Shengsheng, as the second gold store surnamed Zhou, also had unsatisfactory performance in the first half of the year. the total turnover was HK $11.313 billion, down 12.98% year-on-year; The net profit attributable to the parent company fell by as much as 36.41%, and 25 new stores were opened while 47 stores were closed.
Weibo topic.
According to statistics, in the first half of the year, the national gold consumption was 523.76 tons, down 5.61% year-on-year, including 270.02 tons of gold jewelry, down 26.68% year-on-year, although the consumption of gold bars and gold coins was 213.64 tons, a year-on-year increase of 46.02%, but still failed to offset the overall weak demand. In September, gold shipments from the Shanghai Gold Exchange were 114.8 tonnes, an increase from August due to seasonal stocking demand, but still at a low level in recent years.
Analysts believe that as the gold price continues to rise, consumer demand will gradually be suppressed, especially the consumption of gold jewellery other than wedding demand will decrease, so the rise in gold prices may lead to more gold stores closing or closing. Some offline gold shop owners said that despite the discounts, there are still only a handful of customers who actually buy gold jewelry.
Luk Fook Group (0590.HK) and Chow Tai Fook (1929.HK) shares have both halved from their highs, with Luk Fook's share price falling 28% and Chow Tai Fook's share price falling 36% so far this year, evaporating its market value by as much as HK$100 billion.
The market value of the old gold exceeded 20 billion Hong Kong dollars
However, in the first half of this year, there were also gold jewelry brands that successfully achieved growth against the trend, and Laopu Gold was one of them. The brand's revenue in the first half of the year soared 148% to 3.52 billion yuan, profits soared 199% to 590 million yuan, gross profit margin was 41.3%, and the stock price has risen by as much as 37% for 7 consecutive days, with a total market value of more than 21 billion Hong Kong dollars. From the very beginning, Laopu Gold has focused on high-end products, and the price of a single product is often tens of thousands of yuan, focusing on ancient gold. The brand currently has 33 self-operated stores in 14 cities, and the stores are also located in high-end shopping malls such as SKP and The MixC. According to the staff of the old gold store, the price of the ancient gold series has increased twice this year, with an average increase of about 9%.
Nandu reporter Wang Xin