Chow Tai Fook Profits Slump 46%June 08, 16
(IDEX Online News) – Chow Tai Fook recently announced that the economic slowdown in China has hit luxury sales as its full-year profit dropped by 46 percent, according to a report on Bloomberg.com.
The world’s largest publicly traded jewelry chain was particularly hurt by weak retail sentiment in Macua and Hong Kong, and decline in tourism from mainland China, due to the recent strength of the US dollar. Chow Tai Fook had released a profit warning in May, suggesting that its full-year profits could fall as much as 50 percent.
The company said that it expected retail conditions to remain challenging in the region for the foreseeable future. The continued government crackdown on corruption has particularly caused mainland Chinese to avoid Macau – also reducing revenues from gambling.
Chow Tai Fook is looking to retail markets outside of its traditional base, such as the US, Taiwan and South Korea, which together grew 26 percent in the most recent fiscal year.
“The increasingly affluent and sophisticated Chinese consumers continue to look for more personalised products and shopping experience,” the company said in a statement Tuesday. “Lifestyle and leisure spending becomes the trend, with strong outbound tourism boosting the consumption abroad.”