Business Intelligence on Retailing, Franchising, and Consumerism in China

Chinese Tourism Drop Hurts Chow Tai Fook's Net Profit

Hong Kong-based jewelry retailer Chow Tai Fook announced its semi-annual performance ended September 30, 2015, stating that the company realized net profit of HKD1.557 billion, a year-on-year decrease of 42.16%; and its earnings per share was HKD0.156.

According to the company's financial report, Chow Tai Fook's turnover was HKD28.124 billion, a year-on-year decrease of 4.08%; and its sales of individual stores decreased by 8.7% compared with the same period of last year. Of this total, individual store sales in mainland China increased by 0.1% while individual store sales in Hong Kong and Macau decreased by 18.2%. In regards to the individual store sales decline in Hong Kong and Macau, the company attributed it to the decrease of mainland tourists visiting Hong Kong and Macau.

The company revealed that its turnover in mainland China was HKD15.764 billion, a year-on-year decrease of 1.4% and it accounted for 56% of its total turnover.

During the six months ended September 30, 2015, Chow Tai Fook achieved a net increase of 29 retail sites to a total of 2,286 retail sites. At the same time, the company closed 115 retail sites. Chow Tai Fook said its store shutdown during the reporting period was higher than the average number in the past because more department stores in mainland China restructured to meet the changing demands of retail consumers.

The company also revealed that they will integrate some low-efficiency retail sites, which are mainly located in East China and South China regions.

Image Credit: DnDavis

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