Diamond rings in 18-karat rose gold from Chow Tai Fook
Chow Tai Fook Jewellery Group Ltd will focus on improving the efficiency of its retail business and enhancing product offerings despite recording a drop in profits during the six months ended September 30.
Dr. Henry Cheng, chairman of Chow Tai Fook, commented, “While we hold a cautiously optimistic stance in the near term, we remain confident in the long-term prospects of the Greater China jewellery market. With our solid fundamentals, vast industry knowledge and renowned brand name, we are fully equipped to capitalise on business opportunities and emerge stronger out of the current market conditions.”
The group said revenues reached HK$21.52 billion (US$2.77 billion) during the first half of fiscal year 2017, down 23.5 percent from the same period a year ago. Profits were down 21.5 percent to HK$1.22 billion (US$157.3 million) while the adjusted gross profit margin saw an improvement of 160 basis points mainly due to an enhanced product mix and an improvement in the gross profit margin of gem-set jewellery and gold products. The group attributed the profit drop to weak consumer sentiment in the Greater China region and a shift in the purchasing behaviour of mainland tourists.
Chow Tai Fook said it will focus on improving store efficiency through continual points of sale (POS) consolidation to enhance store productivity in Hong Kong and Macau, while remaining selective in POS expansion in mainland China.
The group will also enhance product offerings and extend product differentiation by promoting the distinctive “Chow Tai Fook T MARK” diamond brand, as well as rolling out more Hearts On Fire collections, fashion jewellery, and licensed and proprietary collections.
It will further deploy the “Smart+” initiatives to better understand customer preferences and improve buyers’ shopping experience. A revamp of retail store image and POS segmentation, particularly in mainland China, will also be continued to address the needs of different consumer groups. “With a goal of achieving sustainable business development, the group shall continue to invest in technology and talents to enhance its competitive edges,” the company added.
The group has a total of 2,326 POS as of September 30.