Hong Kong-based jeweler Tse Sui Luen (TSL) reported a loss in the first fiscal half amid economic challenges in China and dwindling demand for diamond jewelry.
The company’s net loss came to HKD 58.3 million ($7.5 million) for the six months that ended September 30, compared with a profit of HKD 1.8 million ($230,000) a year ago, TSL said last week. Sales for the period rose 8% to HKD 1.35 billion ($172.8 million).
Revenue in mainland China, TSL’s biggest market, decreased 3.2% to HKD 870.6 million ($111.7 million) as consumers tightened their budgets in light of the challenging economy. The company also sold more gold products as diamond demand dropped.
“Affected by international economic concerns and China’s property sector challenges, consumers are more conservative in their spending,” the company stated. “The Chinese government has rolled out measures to bolster consumer confidence and speed up economic recovery, which has led to some improvement in retail sales. Riding on the uptrend of pure gold demand, the group has focused more on [that] business to partially compensate for the loss of sales caused by the sharp decline in diamond demand.”
In Hong Kong and Macau, sales surged 41% to HKD 407.5 million ($52.3 million) as the municipality saw a steady rebound in tourism following the reopening of its border with mainland China. The company also benefited from the Hong Kong government’s distribution of new stimulus vouchers, as well as large-scale campaigns to stimulate the economy.
“These government initiatives helped the group to achieve a notable increase in the turnover of its Hong Kong and Macau retail business,” Tse Sui Luen added.
Hong Kong retail sales continued to gain speed in July as tourists flocked back to the municipality and the job market improved.
Hong Kong retail sales from jewelry, watches, clocks and valuable gifts climbed 20% year on year to HKD 4.95 billion ($632.9 million) for the month, according to data the government’s Census and Statistics Department released last week. Retail sales across all product categories rose 17% to HKD 33 billion ($4.22 billion).
The growth also reflected a favorable comparison with the same period a year ago, when Hong Kong was experiencing tight Covid-19 restrictions. Tourism to the municipality was exceptionally low at the time. Much of Hong Kong’s luxury revenue is derived from visitors — primarily from China — who travel there to purchase goods. Hong Kong’s border with the mainland reopened at the start of the year.
For the first seven months, proceeds from jewelry, watches, clocks and valuable gifts surged 64% to HKD 35.36 billion ($4.52 billion). Total retail sales for the period jumped 20% to HKD 238.05 billion ($30.43 billion).
In July, 3.6 million visitors arrived in Hong Kong, compared to 48,048 during the same month last year. Of those who traveled to the municipality in June, 3 million were from the mainland, versus 40,083 in 2022.
“The value of total retail sales continued to increase visibly in July over a year earlier alongside the increase in visitor arrivals and positive consumption sentiment,” a government spokesperson said. “The revival in inbound tourism should continue to benefit the retail sector in the coming months. Improved labor-market conditions and the government’s various measures to support consumption should also help.”
