Luk Fook latest to warn of falling profit
Luk Fook has become the second major jewellery retailer this week to warn shareholders of a severe impact on its bottom line.
In a filing with the stock exchange yesterday, Luk Fook said it anticipated a decline of about 40 per cent compared to the corresponding period last year.
The company said the drop was primarily due to declining gem-set jewellery product revenue, a fall in the overall gross margin as a result of increased sales mix of gold products driven by the small-scale “gold rushes” and a higher rent to revenue ratio. Expanded losses in investments in relation to Hong Kong Resources Holdings and its subsidiary also contributed.
Earlier this week rival jeweller Chow Tai Fook warned of a profit plunge as high as 50 per cent citing similar reasons.