Hong Kong-based retailer Chow Sang Sang has ventured into the synthetic jewelry market with the opening of its first physical store featuring synthetic diamonds, following two years of online operations.
The jewelry brand, "The Future Rocks," launched by the company, opened a pop-up store in Hong Kong during the first half of this year. The company has also expanded its product line, introducing a new range of synthetic diamond and sapphire jewelry.
Despite this expansion, the financial results for the first half of the year reflected a challenging market. Sales dropped by 13% year-over-year to HKD 11.31 billion (USD 1.45 billion). Retail sales fell by 13% to HKD 11.05 billion (USD 1.42 billion), while other income, primarily from real estate investments, decreased by 20% to HKD 263.7 million (USD 33.8 million). Profits also declined by 37% to HKD 519.8 million (USD 66.7 million).
Chow Sang Sang noted that same-store sales (stores open for at least 12 months) in Hong Kong and Macau saw a 4% growth during the first quarter, indicating steady performance. However, in mainland China, same-store revenue dropped by 9% due to unfavorable comparisons with the previous year, despite the reopening of the border between Hong Kong and mainland China, which had initially spurred luxury purchases. The second quarter saw a 24% decline in same-store sales in both China and Hong Kong/Macau, driven by rising gold prices.
For the first half of the year, same-store sales of gold jewelry in China decreased by 12%, while diamond jewelry sales dropped by a significant 42%. In Hong Kong and Macau, gold same-store sales were down by 8%, and diamond jewelry sales fell by 21%.
This cautious move into synthetic jewelry appears to be a response to the challenging market conditions, possibly as a way to explore new avenues and mitigate declining sales. However, the company seems to be approaching this expansion with a measured strategy, likely to gauge market reception before committing further.