Chow Tai Fook Jewellery Group Ltd said it plans to shut about 15 of its Hong Kong stores after their leases expire this year, in a sign that major retailers are starting to withdraw from the city’s economy as anti-China protests continue.
In the first significant pullback by a luxury retailer after months of fiery demonstrations that have driven tourists away, the world’s second-most valuable jewellery chain said in an emailed statement that it will not renew the leases of a “mid-teens” number of stores in the year starting from April.
Chow Tai Fook is closing the stores because it expects “macro headwinds” to continue to have an impact in the next six to 12 months, it said. Besides the protests that have at times crippled the city, volatile gold prices and US-China trade tensions are also weighing on the company’s outlook.
The company currently has 86 Chow Tai Fook retail outlets and five stores under other brands in Hong Kong. It is the second largest jeweller in the world by market value, after Tiffany & Co.
Chow Tai Fook said that its store closures will mainly be located in tourist districts such as Causeway Bay, Mong Kok and Tsim Sha Tsui and that it will continue to review store productivity and optimise its retail network in Hong Kong.
The jeweller, controlled by the billionaire Cheng family, has seen same-store sales fall for three consecutive quarters in Hong Kong and Macau. It’s now focussed on mainland China, where it plans to add 600 new stores this year.