Hong Kong-based retailer Chow Sang Sang saw profit increase sharply in the first half after closing a large portion of its store network and implementing other cost-control measures.
Total group revenue for the six months that ended June 30 slipped 2% year on year to HKD 11.04 billion ($1.42 billion), the jeweler said Wednesday. Retail sales slid 3% to HKD 10.76 billion ($1.38 billion), while profit spiked 73% to HKD 899 million ($115.3 million).
During the first quarter, same-store sales — those at branches open for at least 12 months — fell 11% year on year in China and 13% in Hong Kong and Macau. However, those figures improved in the second quarter, with China showing a 6% year-on-year increase and Hong Kong and Macau up 1% from the same period in 2024.
While volatile gold prices brought down overall gold-jewelry sales, according to the company, it attributed its higher gross margins in part to the ongoing rise in those prices. Fixed-price branded designs continued to perform well.
Same-store sales of gold jewelry slid 3% in China during the first half, while those for gem-set jewelry declined 23%. In Hong Kong and Macau, the declines in those categories were 4% and 22% respectively. Gem-set jewelry’s poorer performance was mostly due to a drop in diamond sales, according to Chow Sang Sang.
Gold jewelry and other gold products accounted for 82% of total sales in China and 77% in Hong Kong and Macau. Diamond-set gold jewelry saw an upward trend in the latter locales, the company added.
The jeweler shut a net 75 stores in the six-month period, mostly in mainland China, continuing a trend of reducing its network. In 2024, it closed a net total of 74 locations as part of efforts to deal with economic challenges.
Chow Sang Sang has seen sales improve since the end of the first half. However, it believes diamond jewelry will take more time to recover, so it plans to focus on the increasingly popular gold-jewelry segment for now to make up for that shortfall. The company also intends to close more stores that have “no strategic value.” By the end of the year, the retailer expects its store count to have decreased by 10% from the 958 locations it had in 2024.
Image: A Chow Sang Sang store in Hong Kong. (Shutterstock)