Chow Tai Fook posts narrower fall in China same store sales

Chow Tai Fook Jewellery Group Ltd, China's biggest jewellery retailer by market value, said declines in same store sales in China narrowed in the quarter ended June due to better gem-set jewellery sales, but Hong Kong and Macau remained weak.

Mainland China showed a sequential improvement in same store sales in the fiscal first quarter as compared with the previous quarter, with a 12 percent decline in same stores sales of gem-set jewellery against a 24 percent drop previously, the jeweller said in a filing to the Hong Kong bourse.

"In view of the huge market in China, we maintain our store opening target of 50-60 stores in the current fiscal year," managing director Kent Wong told a conference call, when asked if the group plans to scale back expansion in China.

Wong also said Chow Tai Fook would stick to its plan of closing 7-8 stores in Hong Kong as sales in Hong Kong and Macau remain weak amid stagnant consumer sentiment and a decline in mainland tourist numbers.

The company's same store sales in China fell 17 percent by value in the three months ended in June from a year earlier, while Hong Kong and Macau was down 20 percent.

That was compared with a 25 percent drop in China in the previous quarter ended in March, while Hong Kong and Macau fell 27 percent.

Hong Kong is struggling with mounting economic challenges and a strong currency, as the Hong Kong dollar is linked to the U.S. dollar. Meanwhile, mainland tourists are avoiding the city amid political tensions with China and growing calls from radical activists for greater autonomy from Beijing.

Hong Kong saw its sales in jewellery, watches, clocks and valuable gifts fall 18.7 percent in May, more than the 16.6 percent drop in April.