Luk Fook Jewelers Sees Surge in Retail Sales
Luk Fook, a well-known Hong Kong-based jewelry brand, reported a significant increase in retail sales for the third fiscal quarter. The rise in sales is mainly attributed to the recovery of tourism and a surge in gold prices. Sales soared by 46% year-on-year for the period ending December 31, 2023, compared to the same period the previous year. This surge was boosted by the reopening of borders that brought a revival in visitor traffic, particularly in Hong Kong, Macau, and the Chinese mainland. The end of pandemic-related restrictions and hurdles also played a role in driving sales.
The groundwork laid down for tourism recovery has led to the positive growth in retail sales, with the company seeing a remarkable 97% increase in sales in Hong Kong and Macau. Moreover, experiences in-store for at least a year also showed a significant increase of 80% in the two regions. Similarly, sales in mainland China increased by 37% despite sales from existing stores lagging behind, growing only by 18%.
Furthermore, same-store sales of gold products experienced a surge of 94% in Hong Kong and Macau markets due to the rise in gold prices. Both fixed-price gold jewelry and diamond-set jewelry witnessed notable increments of 88% and 25%, respectively. The trend was different in mainland China, with an increase of 22% in same-store sales of gold products and a relatively lower growth rate for diamond-set jewelry.
The insights suggest that the recovery in tourism that has been witnessed in Hong Kong and Macau has translated into increased spending on luxury items such as fine jewelry. The rise in gold prices has also sparked higher-value transactions, as consumers view gold as a safe investment amid economic uncertainty. The performance of Luk Fook during this period paints a larger picture of growing consumer confidence and spending in the Asia-Pacific region. This is reflective of the region’s economic recovery and bounce-back from the challenges posed by the Covid-19 pandemic.
