SHANGHAI — Chow Tai Fook Jewellery Group has wholly acquired contemporary colored gem specialist Enzo Jewelry, the company announced on Friday, a brand that will boost its reach in the mainland Chinese market while political troubles dampen the group’s outlook in Hong Kong.
The price of the transaction was not disclosed but Chow Tai Fook stated that it would not have a material financial impact on the group’s consolidated net assets or operating results for the financial year ending March 31.
“We are delighted to have Enzo joining our Chow Tai Fook family,” said Adrian Cheng, executive director of Chow Tai Fook Jewellery Group. “Distinguished by exquisite craftsmanship and creativity, Enzo will continue its niche position as a natural-colored gem specialist to complement the group’s multibrand strategy, enabling us to further venture into the colored gemstone arena. On the other hand, Enzo can leverage Chow Tai Fook’s retail and industry know-how to generate greater values to its customers.”
Founded in 2004, Enzo pieces are moderately priced starting from under 3,000 renminbi but can reach up to 50,000 renminbi — $437 to $7289 at current exchange — and caters to the independent, modern woman interested in fashionable jewelry.
Currently, Enzo has around 60 points-of-sale in mainland China, primarily located in tier one and tier two cities, and also works with major e-commerce platforms Tmall, JD.com and VIP.com. The brand aims to expand its footprint further in mainland China through both self-operated and franchise models, Chow Tai Fook said.
Chow Tai Fook earlier this week stated that it would close 15 stores in Hong Kong. Although still a relatively modest decrease from the company’s 3,789 points of sale globally, it points to the ongoing struggle for retailers in Hong Kong heavily exposed to the fluctuations of mainland Chinese tourist shoppers, who are now avoiding the city’s continuing political unrest.
For the quarter ended Dec. 31, Chow Tai Fook’s Hong Kong and Macau retail sales were down 38 percent year-over-year, led by gem-set jewelry which fell 53 percent, while gold product sales fell 26 percent. Meanwhile, its mainland China business is performing strongly, rising by 17 percent.
“The tourist-led retail structure in Hong Kong will change in the future — the recent disruptions have accelerated the process but never the root course of it,” said Veronica Wang, partner at OC&C Strategy Consultants.
“With the growing mobility of Chinese consumers — easier to get visa, more destination options — Chinese travelers now have a much broader choice of destinations to shop, from Japan, [South] Korea in Asia to France and Italy in Europe. Therefore, Hong Kong will gradually lose its position as the shopping paradise and the demographics of Chinese travelers who go to Hong Kong will be different from before.”