Chow Sang Sang opening more stores
With a focus on urban markets, Chow Sang Sang Holdings International plans to open around 50 stores this year.
While consumer sentiment improved in the second half of last year for the jewellery retailer, it says a strong recovery is yet to be seen, especially in Hong Kong. Meanwhile, global markets are already anticipating an interest rate rise, and international trade disputes seem to be looming.
In Hong Kong, the company will continue with the realignment of its network to match the change in consumer patterns and preferences. Overall, it expects to reduce the amount of floor space with no significant changes in the number of shops.
“In China, increasing sophistication in consumer behaviour provides opportunity for growth via product and brand differentiation. As our online competition heats up, we are putting more effort into offering a seamless customer experience.”
Turnover last year grew 3 per cent to HK$16.6 billion (US$2.1 billion). The disposal of a part of a long-term holding of shares in Hong Kong Exchanges and Clearing resulted in a gain of $114 million. Including this amount, the group’s overall profit attributable to equity holders increased by 18 per cent to $876 million.
After dropping for three consecutive years, jewellery retail turnover returned to positive growth, rising 3 per cent. Jewellery retail accounted for 87 per cent of the group’s turnover.
Operating profit fell by 5 per cent to $902 million, because of an extra gain of $176 million in 2016 resulting from a movement in the price of gold.
Sales slipped per cent in Hong Kong and Macau, affected by shop closures. Same-store sales growth was down 2 per cent, mainly because of soft turnover of gold in the fourth quarter.
Sales of gem-set jewellery improved in the second half, and in the last quarter reversed its downward trend since 2016.
During the year, four Chow Sang Sang shops and one watch branch in the tourist district were closed. However, three new shops and one new watch branch were established in non-tourist districts.
Despite Macau’s tourist traffic improving, shops in the shopping arcades performed worse than the main-street shop.
Total turnover in Mainland China rose 9 per cent year-on-year to $8 billion. In RMB terms, this was 11 per cent growth, and same-store sales rose 5 per cent.
Online sales continued to grow, accounting for about 14 per cent of China sales. Gold products dominated the sales mix.
At the end of the year, the group had 422 shops in 119 cities. Of these 63 were new outlets, and there were 15 closings. Of the new stores, 28 were set up in shopping malls.