Hong Kong-based Luk Fook will accelerate its expansion in mainland China, considering the market a strong source of revenues amid struggles in its home territory.

The jewelry retailer plans to open a net 250 new mainland stores in the current fiscal year ending March 31, 2021, mainly in fourth- and fifth-tier cities, it said Thursday. The company also aims to develop its e-commerce activities in China and strengthen its cooperation with online retail platforms, it added.

This comes after revenue slid 47% year on year to HKD 3.34 billion ($431.4 million) in the first fiscal half ending September 30, mainly reflecting a slump in Hong Kong. Group profit dropped 41% to HKD 293 million ($37.8 million).

Sales in Hong Kong nosedived 68% to HKD 1.16 billion ($149.7 million) as the Covid-19 pandemic dented tourist sales and hit local sentiment. Revenue in China dropped at a gentler rate, down 18% to HKD 2.18 billion ($281.7 million).

Luk Fook will shut a net two stores in Hong Kong, reasoning that it will take a while for mainland tourists to return to the municipality and for the retail environment to become normal again. But its outlook for the mainland was more positive.

“In view of the anticipated considerable growth of the middle-class population in [the] mainland, the group remains optimistic about the mid- to long-term business prospects, and will focus its expansion in the mainland market,” it explained. “The group looks forward to regaining business growth in the near future.”