Sales at Chow Tai Fook fell in the first fiscal quarter as surging gold prices and economic challenges dented consumer demand for jewelry. 

Retail sales across the group decreased 20% year on year for the three months that ended June 30, the Hong Kong-based jeweler reported last week. Sales slipped 17% on the mainland and were down 29% in Hong Kong and Macau. Sales in China comprised 88% of total revenue, while Hong Kong and Macau made up 12%. 

“During the first quarter, both mainland China and Hong Kong and Macau recorded negative [sales growth] as macro challenges continued to impact consumers’ spending,” the company commented. “Coupled with gold-price volatility at high levels, we witnessed hiccups in gold-jewelry demand in the quarter.” 

Same-store sales — at branches open for at least a year, excluding franchises — declined 26% in China. In Hong Kong and Macau, same-store sales plunged 31%. Same-store sales of gold jewelry fell 28% on the mainland, dropping 33% in Hong Kong and Macau. Meanwhile, demand for diamond jewelry also took a hit. During the quarter, sales of gem-set jewelry decreased 32% in China and 31% in Hong Kong and Macau. 

Over the three months, Chow Tai Fook closed a net 91 stores in mainland China, while Hong Kong and Macau saw no net change. The group’s total stands at 7,754 points of sale.

Image: A Chow Tai Fook store in China. (Shutterstock)