If you think gold is yesterday’s news, think again.
The latest sign it’s anything but fading amid plunging world prices is the big bet on the gold retail market by Hong Kong’s biggest jewelry chain.
It’s all tied to rich mainlanders who see the same shine in the yellow metal in good times and bad.
Mainland tourist arrivals are slowing but Chow Tai Fook Jewellery Group is pressing ahead with a plan to expand its presence in Tsim Sha Tsui district.
It is reportedly paying HK$6 million a month for a 3,500 square foot shop in the Silvercord shopping mall in Canton Road, a golden venue for wealthy Chinese shoppers.
Already, the jeweler has three shops in Canton Road, one of which it leased last year at 30 percent more than the new outlet.
This one rents about 60 per cent more than the expansive DKNY shop nearby, showing the kind of premium Canton Road commands.
There are 18 Chow Tai Fook shops in Tsim Sha Tsui alone, a small part of tycoon Cheng Yu-tung’s retail empire which boasts 2,100 points of sale.
But Cheng’s intense focus on one district is astonishing.
At the height of the street protests, around the time of China’s “golden week” holiday when Hong Kong media was reporting sparse business for Chow Tai Fook, I happened be in one of its stores in Tsim Sha Tsui.
How wrong they were. The store was doing brisk business and it turns out all five of its outlets in the protest area were full.
Nowadays, it’s probably easier to find gold than a hamburger in Tsim Sha Tsui. There are just eight Big Mac restaurants in the entire district.
In fact, a Chow Tai Fook store now sits where my favorite snack stall in Haiphong Road used to be.
Only cosmetics retailer Sa Sa, a favorite of Chinese women, has as many Tsim Sha Tsui outlets as Chow Tai Fook.
Businesses that cater to women are recession-proof, as the gold retail and jewelry market shows.
Last year, for instance, was not the best for Chow Tai Fook but it was not a bad one either.
Sure, the unremitting frugality and anti-corruption campaign in the mainland has hurt the buying mood of Chinese tourists.
And soaring rents have made it more challenging for businesses to make a profit.
Gold itself has taken a beating, with prices slipping to US$1,200 per ounce in the past 18 months from US$1,400.
But when you have the likes of Chow Tai Fook splashing out on another mega outlet, we have to see the gold jewelry business in another light.
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