Hong Kong-based retailer Chow Tai Fook Jewellery Group is banking on sustained gains in tourism to bolster growth amid a lacklustre fiscal performance in 2023 due to muted market recovery in China. 

Revenues were down 4.3 per cent year on year to HK$94.68 billion (approximately US$12.08 billion) while profits declined by 19.8 per cent to HK$5.38 billion (around US$638.74 million) during the fiscal year ending March 31, 2023. 

“The pandemic in China had affected all businesses, ours inclusive, particularly in 3QFY2023,” the group said. “Our steady expansion of the retail network, combined with recovery post the shift in pandemic-control measures in 4QFY2023, helped mitigate majority of the impact during the financial year.”

China accounted for 86.2 per cent of Chow Tai Fook’s FY2023 revenues while the remaining 13.8 per cent were derived from sales in Hong Kong, Macau and other markets.

Sales however have since rebounded in the first two months of its current financial year, demonstrating a 38.1 per cent overall increase. China saw an uptick of 34.6 per cent while Hong Kong, Macau and other markets recorded a 64.6 per cent rise from April 1 to May 31, 2023.  

Moving forward, the group is counting on improved tourist arrivals and spending alongside continued economic recovery to back business growth in fiscal year 2024. Specifically, China’s economic policies and stimulus measures are expected to drive jewellery retail sales in China, Hong Kong and Macau. 

Chow Tai Fook Jewellery Group Chairman Henry Cheng said, “We are encouraged by the gradual resumption of business in our key markets, and expect FY2024 to be a year of recovery and normality with SSS (same store sales) to resume growth in the mainland, Hong Kong and Macau.”

The group, meanwhile, cited several successful launches last fiscal year, including “Wonderful Life Collection”, and new “CTF • HUÁ Collection,” which contributed around 40 per cent of retail sales value of gold products in China. Hearts On Fire meanwhile continued to make waves in Hong Kong, gaining over a 51.3 per cent increase in sales compared to the same period last year. 

Chow Tai Fook has a total of 7,269 points of sales (POS) in China as of March 31, 2023, a net rise of 1,631 compared to 12 months ago, well ahead of the group’s 7,000 POS target for 2025.