Chow Tai Fook Jewellery Group Limited, in what seems to be an unprecedented move, has announced what it calls “certain unaudited key operational data of the Group” for the two months ended February 29, 2020 (Q4 FY2020 or the Period).  

In view of the threat posed by the COVID-19 virus, the Company had temporarily closed a majority of its POS in Mainland China since late January 2020, and Hong Kong and Macau from early February. This step was taken keeping the interest of public health and safety of its staff in view; and in response to “the measures of local governments in containing the spread of COVID-19 virus”.

Needless to say, business in both markets was inevitably affected during the Period. Comparing the first two months of 2020 with 2019, the Company reported a drop in Retail Sales Value (RSV) of 42% in Mainland China, and 60% in Hong Kong and Macau; a decrease in Same Store Sales (SSS) of 49% in Mainland China and 59% in Hong Kong and Macau;    Same Sales Store sales by volume  dropped by  52% in Mainland China and 61% in Hong Kong and Macau.

In terms of products, sales of gem-set jewellery were down 50% in Mainland China, and 57% in Hong Kong and Macau; and sales of gold products decreased by 53% in China, and 61% in Hong Kong and Macau.

However, Chow Tai Fook has now re-opened a substantial number of its stores.

“As of 29 February 2020, approximately 70% and 64% of our POS in Mainland China and Hong Kong and Macau resumed operations,” the Company announced.

Chow Tai Fook also revealed that RSV of e-commerce business in Mainland China dropped 24% year-on-year; while volume decreased by 36% in the Period.

“Operations at the Group’s production facilities in Shunde and Shenzhen resumed gradually following the permissions of local governments, while Wuhan Production Centre (the Centre) was still under temporary suspension until further notice,” the Company added. “Yet, the Centre produces mainly mass luxury gold products, contributing about 15-20% of the Group’s jewellery production. In the interim, we have reallocated production to our facilities in Shunde and Shenzhen which have sufficient capability to support our business.”

The inventories which were built up before Chinese New Year to meet festive demand, remained high due to “the weakened consumer sentiment and sluggish demand during the Period”.  Chow Tai Fook says it expects inventory will remain at a higher level than usual in the short term.

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