Hong Kong jeweler Luk Fook plans to expand its diamond-jewelry offering after paring it back over the past year and a half, following an upswing in the category’s sales.
“Recent business improvements indicate that consumers are gradually adapting to high gold prices, suggesting a potential normalization of gold sales,” the company said last week. “Furthermore…the group will continue to actively promote fixed-price gold products and fixed-price diamond-set pure gold products. In light of the recent improvement in diamond-product sales, the group will also adjust its product and promotional strategies to enhance the performance of diamond-set 18-karat gold products.”
While same-store sales — at self-operated shops that were open a year earlier — of diamond products overall fell 17% year on year in the first fiscal quarter, that result is a sharp improvement on last year’s 52% decline. It also shows a positive comparison with the 36% decrease the company reported in the previous quarter. Sales of diamond products slipped 17% in Hong Kong and Macau for the three months that ended June 30, versus 52% a year earlier, and were down 13% on the mainland, relative to 51% in the first quarter of 2024.
Retail sales value — at self-operated and licensed shops and on e-commerce platforms — grew 13% year on year. Overall sales increased 9% in Hong Kong and Macau and 14% in China. Same-store sales rose 5% for the group, and were up 3% in Hong Kong and Macau and 19% on the mainland.
Same-store sales of gold products overall were flat, after declining 33% in the first fiscal quarter of last year. In China, same-store sales of gold products rose 20%, but were down 4% in Hong Kong and Macau. Same-store sales of fixed-price jewelry gained 19% for the group, and by the same figure in Hong Kong and Macau, while China witnessed a 16% increase in the category.
During the three months from April to June, Luk Fook closed a net 125 stores, putting its June 30 global total at 3,162. However, the company plans to grow its network on the mainland in the coming year, in part as a means of offsetting any potential fallout from US tariffs, it reported.
“The US tariff policies continue to impact the global economy and heightened tensions in China-US relations,” Luk Fook added. “The mainland government has been actively forming a ‘dual circulation’ strategic layout, which vigorously boosts domestic demand with a number of policies being introduced. The group remains cautiously optimistic about its medium- and long-term business prospects in the mainland, and will continue to expand in the mainland market in the future.”
Image: A Luk Fook store in Hong Kong. (Shutterstock)