HONG KONG — Hong Kong-based jeweler Chow Tai Fook said net profit for fiscal year 2014 rose 9 percent, driven by strong retail sales and an improving wholesale business in mainland China.
Net profit for the year ending March 31 was 7.45 billion Hong Kong dollars, or $961 million, compared with 5.68 billion Hong Kong dollars, or $732.7 million, a year ago. Revenue rose 34.8 percent to 77.4 billion Hong Kong dollars, or $9.98 billion. Chow Tai Fook, the largest jeweler in China, said the sales growth was driven mainly by an increase in gold sales and that the wholesale growth was driven by strong inventory replenishment demand from franchisees at existing and new stores.
Slowing economic growth and a government crackdown on luxury spending has put a dent in many luxury retailers, but Chow Tai Fook — which dominates in the mass luxury market — said it expects the impact to be “just short term.”
Although the company acknowledged a decrease in the number of mainland Chinese tourists in Hong Kong and Macau as moneyed tourists are increasingly choosing other destinations, the jeweler said it is confident it can cope with the challenges by enhancing customer services. Hong Kong and Macau’s tax-free environment should also ensure that the cities continue to be popular shopping destinations.
“We are cautiously optimistic with our business outlook for the 2014/2015 financial year. With our solid foundations and competitive strengths, we are not only able to capture opportunities and optimize returns during good times but also capable of meeting challenges and weathering adversities in the face of market volatility and economic headwinds,” managing director Kent Wong said.
Medium to long-term, the company said it maintains a “positive view” because there is large demand for mass luxury jewelry and wedding-related jewelry in China, Hong Kong and Macau. In addition, youth line products and fashion jewelry are increasingly popular among young customers.
During the year, sales of gem-set jewelry made up 21.1 percent of sales while gold products comprised of 61.2 percent of revenue. Gold prices dropped in the March to June period last year, triggering a buying spree.
Chow Tai Fook’s largest market is mainland China, where it gets 54.5 percent of total revenue. The jeweler opened a net 188 points of sale in China during the year, finishing with 1,965 points of sale. Hong Kong, Macau and other Asian markets make up the remaining 45.5 percent of sales. The jeweler opened a net 7 points of sales in Hong Kong and Macau during the fiscal year for a total of 112. The company said it will continue to open a net 200 points of sales in China – mainly tier three or lower tiered cities – each year. It is taking a “flexible” approach to opening more points of sales in Hong Kong and Macau. Online sales are another area of growth, increasing by 90.7 percent during the fiscal year.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews