Turnover dips for Tse Sui Luen Jewellery
Consolidated turnover dropped by 11.6 per cent for Tse Sui Luen Jewellery (International) for the six months ended August 31.
Announcing its unaudited interim results, the company says its business in China grew steadily, contributing 60 per cent of turnover for the half-year compared to 49 per cent for the same period last year.
Tse Sui Luen’s performance is impressive when compared to peers Chow Tai Fook, whose sales tumbled 30 per cent in Hong Kong and Macau, and by 22 per cent on the mainland in the latest quarter, and Luk Fook, whose sales fell by 37 per cent during the latest quarter and 24 per cent during the previous quarter.
As Tse Sui Luen Jewellery extended its eCommerce platform, its online business increased about fivefold.
Its overall sales for the period fell from HK$1.753 billion (US$226 million) to HK$1.550 billion, with the profit attributable to the company owners falling by 24.1 per cent to $11.7 million. This is mainly attributed to a “significant” year-on-year drop in retail sales activity in Hong Kong resulting from the continuing fall in the number of tourists from China.
“On a more positive note, we are pleased to report that the group’s overall performance was buoyed by the encouraging growth of our mainland businesses, especially our franchises,” says chairman Annie Yau On Yee.
There was also an increase in the gold price of more than 6.9 per cent during the period because of uncertainties in the global economy and the impact of Brexit. The total weight of gold sold by the group slipped by almost 27 per cent.
This saw sales turnover in Hong Kong and Macau decrease by 32.6 per cent with same-store sales for all businesses dropping 31.4 per cent.
To counteract this, the group explored new consumer groups and attracted more market attention with limited-time offers on gold products. It also developed new products, including the value-for-money Nova collection aimed at “office lady” clientele.
To reinforce the group’s brand positioning as a wedding expert, its Park Lane flagship store was transformed into a wedding concept jewellery store with a wedding pop-up corner.
Given the challenging market situation, the group will keep reviewing its store network in Hong Kong, with special attention to tenancy renewals. During the first half, rents adjusted downward for renewed leases, resulting in a 14.4 per cent drop in rental expenditure in Hong Kong and Macau. The group hopes to open two more retail stores this year in Hong Kong.
Its retail business in China grew by 5 per cent during the half-year, with same-store sales increasing by 1.5 per cent. Sixteen franchised stores were opened, taking the total to 98. Along with 197 self-managed stores, this meant the group had 295 stores in total in China with its footprint extended to 105 cities. Tse Sui Luen believes the rising middle class’ appetite for luxury jewellery will remain strong in China.
While the group’s retail business dropped by 8.4 per cent for the half in Malaysia, it opened a shop in Subang Jaya, Selangor, in June to enhance the sales network. The group will consider adding another one or two more stores in Malaysia over the next year.