Tse Sui Luen Jewellery (International) Ltd. (TSL) (00417.HK) said Wednesday that its business outlook remains uncertain amid an anti-graft campaign in mainland China and political tensions in Hong Kong.
Deputy chief executive Lambert Chan said demand for higher-priced jewelry remains depressed as Beijing’s frugality campaign deepens while buying appetite in Hong Kong is yet to recover from 79 days of street protests last year.
“Most people do impulse purchases and they buy jewelry to reward themselves,” Chan said.
“If they’re not in a good mood, they won’t spend money.”
The company is adopting a prudent business approach due to uncertainties in the global economy.
A weakening yen and a depressed euro may lure mainland buyers away from Hong Kong, he said.
In December, Hong Kong jewelry retail sales fell 3.9 percent after four straight months of growth.
Jewelry, watches and luxury items led the decline, with combined sales plunging 16.3 percent.
Despite the lackluster outlook, Lam said the company is planning to open two to three new local stores this year, adding to its portfolio of 29 in Hong Kong and Macau.
“It’s mainly because our network is not big compared with our peers,” Chan said.
“The new stores will most likely be located in Mong Kok and Causeway Bay.”
He said the market is “still there” although it’s not doing well at this time.
“We need to penetrate it,” he said.
Lam said increasing the number of retail stores can help improve return on investment after a costly marketing and brand promotion campaign.
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